UGC NET Commerce June 2019 Question PaperPaper 1 & Paper 2 with Answer Key
The complete UGC NET June 2019 question paper for Commerce, covering Paper 1 (General Aptitude) and Paper 2 (Commerce). Every question below is shown with its options and the correct answer, and a detailed explanation you can unlock by signing in. All 150 questions are free to practise.
50 questions with the answer key and explanations.
Question 1
Snowball sampling is the process of selecting a sample using
ANetworks
BGroups
CSnowballs
DComputer Programs
Answer:(A) Networks
Explanation
Snowball sampling is a non-probability sampling technique where initial research participants recruit additional participants from among their acquaintances.
A. Networks — correct. The technique relies on social or professional networks to access hidden, marginalized, or hard-to-reach populations through chain referral.
B. Groups — refers to cluster or intact group sampling rather than participant-driven chain referral.
C. Snowballs — a literal distractor drawn from the metaphorical name of the technique.
D. Computer Programs — describes automated or algorithmic sampling rather than social chain referral.
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Question 2
In which of the following research paradigm the focus of concern is on interpreting reality in terms of participant perspective?
AExperimental Research
BEx-post facto Research
CEthnographic Research
DSurvey Research
Answer:(C) Ethnographic Research
Explanation
Qualitative and interpretivist paradigms prioritize understanding social phenomena from the emic or insider perspective of participants.
A. Experimental Research — operates within a positivist paradigm that tests causal hypotheses by controlling and manipulating variables.
B. Ex-post facto Research — examines possible cause-and-effect relationships retrospectively without manipulating independent variables.
C. Ethnographic Research — correct. It immerses the researcher in the cultural setting to interpret lived experiences and shared meanings directly from the participants' viewpoints.
D. Survey Research — gathers quantitative, structured self-report data across large samples to identify broad trends rather than deep interpretive perspectives.
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Question 3
ERIC, MEDLINE and ABI/INFORM are instances of
ACitation services
BElectronic databases
CPrinted databases
DLibraries
Answer:(B) Electronic databases
Explanation
ERIC, MEDLINE, and ABI/INFORM are prominent digital repositories of peer-reviewed academic literature.
A. Citation services — citation indexing platforms such as Web of Science or Scopus specifically track citation counts and network metrics.
B. Electronic databases — correct. ERIC focuses on education literature, MEDLINE indexes biomedical sciences, and ABI/INFORM covers business and management scholarship in searchable digital formats.
C. Printed databases — refers to traditional print indexes and bibliographies such as physical card catalogs or print abstract volumes.
D. Libraries — institutions that provide access to information resources rather than the electronic bibliographic datasets themselves.
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Question 4
What is the main objective of formative evaluation?
ATo promote students to the next class
BTo enhance students’ learning
CTo enhance co-operation in class
DTo understand the learning difficulties
Answer:(B) To enhance students’ learning
Explanation
Formative evaluation is conducted continuously during instruction to monitor student progress and provide actionable feedback that improves ongoing learning.
A. To promote students to the next class — the primary objective of summative evaluation conducted at the conclusion of a term.
B. To enhance students’ learning — correct. It provides timely feedback to both learners and teachers so instructional strategies can be adjusted to maximize achievement.
C. To enhance co-operation in class — a potential social benefit of collaborative group activities, but not the defining objective of formative assessment.
D. To understand the learning difficulties — the specialized objective of diagnostic evaluation, which pinpoints root causes of persistent learning obstacles.
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Question 5
Research design that needs to collect factual information on a continuing basis is classified as
ALongitudinal Study Design
BPre and Post Study Design
CCross-Sectional Study Design
DDouble-Control Study Design
Answer:(A) Longitudinal Study Design
Explanation
Longitudinal research tracks the same subjects or cohorts repeatedly across extended periods to observe patterns, development, and factual changes over time.
A. Longitudinal Study Design — correct. It collects data repeatedly on a continuing basis across successive points in time.
B. Pre and Post Study Design — measures variables at only two specific moments, directly before and after an intervention.
C. Cross-Sectional Study Design — gathers data from different segments of a population at a single specific point in time.
D. Double-Control Study Design — an experimental arrangement using two separate control groups to isolate experimental artifacts.
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Question 6
Match Column-A with Column-B:
Column-A (Methods of Teaching)
Column-B (Focus of a Method)
(a) Collaborative Method
(i) When expertise of teachers are used in teaching
(b) Co-operative Method
(ii) When emphasis is given on students as creator of knowledge
(c) Constructivist Method
(iii) When students share different aspects of a learning activity
(d) Team teaching
(iv) When students help each other to learn
A(a)-(i), (b)-(ii), (c)-(iii), (d)-(iv)
B(a)-(iii), (b)-(iv), (c)-(ii), (d)-(i)
C(a)-(iv), (b)-(iii), (c)-(ii), (d)-(i)
D(a)-(ii), (b)-(iv), (c)-(iii), (d)-(i)
Answer:(B) (a)-(iii), (b)-(iv), (c)-(ii), (d)-(i)
Explanation
Different instructional methods focus on distinct classroom dynamics and roles for teachers and students.
The correct mapping is:
(a)-(iii), (b)-(iv), (c)-(ii), (d)-(i)
(a) Collaborative Method — (iii) When students share different aspects of a learning activity — learners distribute tasks and contribute separate components toward a collective project.
(b) Co-operative Method — (iv) When students help each other to learn — small, structured groups work interdependence to support one another's academic progress.
(c) Constructivist Method — (ii) When emphasis is given on students as creator of knowledge — learners actively build meaning and personal understanding from experience.
(d) Team teaching — (i) When expertise of teachers are used in teaching — two or more educators pool their subject knowledge to plan and instruct a shared class.
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Question 7
A tentative proposition with unknown validity that specifies a relationship between two or more variables is called
Aresearch problem
Bresearch proposal
Cresearch design
Dresearch hypothesis
Answer:(D) research hypothesis
Explanation
A research hypothesis is an informed, testable conjecture proposed to explain an observed relationship between variables.
A. research problem — the broad gap in knowledge or practical issue that warrants systematic investigation.
B. research proposal — a formal document detailing the rationale, methodology, and work plan of a proposed study.
C. research design — the overarching architectural blueprint and strategy for empirical data collection and analysis.
D. research hypothesis — correct. It states a tentative, testable relationship between variables whose validity remains unknown until tested.
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Question 8
Student-Centric Classroom is meant for
AAddressing the individual differences
BReducing teacher-oriented lectures
CRecalling the previous knowledge
DEngaging the entire class
Answer:(A) Addressing the individual differences
Explanation
Learner-centered education prioritizes the unique readiness, learning style, and pace of every student.
A. Addressing the individual differences — correct. The primary aim of student-centric pedagogy is to adapt instruction, materials, and pacing to diverse learner needs.
B. Reducing teacher-oriented lectures — an instructional consequence of moving toward active learning, but not its primary philosophical objective.
C. Recalling the previous knowledge — a standard introductory step in many instructional models rather than the core goal of student-centered learning.
D. Engaging the entire class — a broad classroom management goal that applies to many instructional formats, not solely student-centric designs.
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Question 9
The following teaching aids can be used by a teacher in the classroom as a live interactive device:
A live interactive teaching aid requires synchronous, real-time two-way communication between teacher and students.
(b) Skype — provides real-time synchronous video and audio conferencing.
(c) On-line Chat — delivers instantaneous, live text interaction during a learning session.
(d) Tele-conferencing — connects participants simultaneously through real-time voice and video transmission.
(a) E-mail, (e) Face-book, and (f) Blog — operate primarily as asynchronous media where communication occurs with substantial time delays.
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Question 10
A teacher intends to find out the learning difficulties of students. Which of the following tests can be used?
ASummative Test
BFormative Test
CPerformance Test
DDiagnostic Test
Answer:(D) Diagnostic Test
Explanation
Diagnostic assessment is designed specifically to detect underlying learning deficits and persistent cognitive hurdles.
A. Summative Test — assesses overall cumulative achievement at the end of an instructional cycle for certification or grading.
B. Formative Test — monitors daily progress and provides ongoing feedback during the teaching-learning process.
C. Performance Test — evaluates practical application of skills through hands-on demonstrations rather than diagnosing specific learning obstacles.
D. Diagnostic Test — correct. It identifies the root causes of recurring learning difficulties to inform targeted remedial instruction.
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Question 11
Animals do not possess language because
An important difference between human beings and animals is the property of language. Animals have a rudimentary information process but this process does not have the sophistication and complexity of human language. If two dogs communicate, they pass on information but they can’t discuss details the way humans can. While humans are blessed to possess the language faculty, most of the time they don’t utilize it to its greatest potential. Perhaps this is because human beings tend to react rather than respond. And a lot of the message of languages is lost in this reaction.
In the daily use of language, people forget the complex process involved in order to put even one word in place. The wonder of this process lies in the fact that it is involuntary in nature, the whole set of chain processes right from the command in the brain to the forming of words from the message required to the movement of the vocal chords and corresponding movements in the lungs and mouth takes place within seconds. Perhaps the whole suggestion of ‘think before you speak’ may lead to a silent world!
In the world of daily interaction, language becomes a marker and a means of projecting identity. The people around us identify us with a certain style of using language and unknowingly, each language user follows this style by habit. It is not a bad idea to record one’s spoken communication from time to time, as this will assist in removing any unwanted elements that the speech may be expressing. Similarly, it is a good idea to step back once in a while and read one’s written communication objectively.
Athe power of speech is missing
Bthe life breath is missing
Cthe level of complexity is missing
Dthe information-sharing is missing
Answer:(C) the level of complexity is missing
Explanation
The passage highlights structural sophistication as the primary dividing line between animal communication and human language.
A. the power of speech is missing — the text focuses on underlying complexity rather than mechanical vocal ability alone.
B. the life breath is missing — not mentioned or implied anywhere in the passage.
C. the level of complexity is missing — correct. The passage states that animal communication is rudimentary and lacks the sophistication and complexity of human language.
D. the information-sharing is missing — contradicts the text, which explicitly affirms that animals do pass on information.
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Question 12
When human beings react rather than respond
An important difference between human beings and animals is the property of language. Animals have a rudimentary information process but this process does not have the sophistication and complexity of human language. If two dogs communicate, they pass on information but they can’t discuss details the way humans can. While humans are blessed to possess the language faculty, most of the time they don’t utilize it to its greatest potential. Perhaps this is because human beings tend to react rather than respond. And a lot of the message of languages is lost in this reaction.
In the daily use of language, people forget the complex process involved in order to put even one word in place. The wonder of this process lies in the fact that it is involuntary in nature, the whole set of chain processes right from the command in the brain to the forming of words from the message required to the movement of the vocal chords and corresponding movements in the lungs and mouth takes place within seconds. Perhaps the whole suggestion of ‘think before you speak’ may lead to a silent world!
In the world of daily interaction, language becomes a marker and a means of projecting identity. The people around us identify us with a certain style of using language and unknowingly, each language user follows this style by habit. It is not a bad idea to record one’s spoken communication from time to time, as this will assist in removing any unwanted elements that the speech may be expressing. Similarly, it is a good idea to step back once in a while and read one’s written communication objectively.
AThey lose the message
BThey lose control
CThey become emotional
DThey can’t speak
Answer:(A) They lose the message
Explanation
The passage directly links impulsive reactions to the degradation of linguistic expression.
A. They lose the message — correct. The passage explicitly notes that human beings tend to react rather than respond, and a lot of the message of language is lost in this reaction.
B. They lose control — an unsupported emotional deduction not stated in the text.
C. They become emotional — another outside interpretation not explicitly presented in the passage.
D. They can’t speak — contradicts the passage, which observes that people still speak but communicate suboptimally.
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Question 13
The process of language is a wonder because it is
An important difference between human beings and animals is the property of language. Animals have a rudimentary information process but this process does not have the sophistication and complexity of human language. If two dogs communicate, they pass on information but they can’t discuss details the way humans can. While humans are blessed to possess the language faculty, most of the time they don’t utilize it to its greatest potential. Perhaps this is because human beings tend to react rather than respond. And a lot of the message of languages is lost in this reaction.
In the daily use of language, people forget the complex process involved in order to put even one word in place. The wonder of this process lies in the fact that it is involuntary in nature, the whole set of chain processes right from the command in the brain to the forming of words from the message required to the movement of the vocal chords and corresponding movements in the lungs and mouth takes place within seconds. Perhaps the whole suggestion of ‘think before you speak’ may lead to a silent world!
In the world of daily interaction, language becomes a marker and a means of projecting identity. The people around us identify us with a certain style of using language and unknowingly, each language user follows this style by habit. It is not a bad idea to record one’s spoken communication from time to time, as this will assist in removing any unwanted elements that the speech may be expressing. Similarly, it is a good idea to step back once in a while and read one’s written communication objectively.
Aa reaction
Ba response
Csmooth
Dinvoluntary
Answer:(D) involuntary
Explanation
The passage identifies the involuntary coordination of neural and physiological mechanisms as the true wonder of speech.
A. a reaction — the text treats reacting as a common human limitation that diminishes communication.
B. a response — presented as the ideal form of communicative engagement, but not what makes the physical process a wonder.
C. smooth — the author describes the rapid succession of events, but does not use smoothness to explain the wonder.
D. involuntary — correct. The second paragraph states that the wonder of this process lies in the fact that it is involuntary in nature, coordinating brain commands and vocal organs in seconds.
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Question 14
The world will become a silent place if people will think
An important difference between human beings and animals is the property of language. Animals have a rudimentary information process but this process does not have the sophistication and complexity of human language. If two dogs communicate, they pass on information but they can’t discuss details the way humans can. While humans are blessed to possess the language faculty, most of the time they don’t utilize it to its greatest potential. Perhaps this is because human beings tend to react rather than respond. And a lot of the message of languages is lost in this reaction.
In the daily use of language, people forget the complex process involved in order to put even one word in place. The wonder of this process lies in the fact that it is involuntary in nature, the whole set of chain processes right from the command in the brain to the forming of words from the message required to the movement of the vocal chords and corresponding movements in the lungs and mouth takes place within seconds. Perhaps the whole suggestion of ‘think before you speak’ may lead to a silent world!
In the world of daily interaction, language becomes a marker and a means of projecting identity. The people around us identify us with a certain style of using language and unknowingly, each language user follows this style by habit. It is not a bad idea to record one’s spoken communication from time to time, as this will assist in removing any unwanted elements that the speech may be expressing. Similarly, it is a good idea to step back once in a while and read one’s written communication objectively.
Atoo much
Bbefore listening
Cbefore responding
Dbefore speaking
Answer:(D) before speaking
Explanation
The text humorously highlights how deliberate cognitive pauses could interrupt the natural rapid flow of speech.
A. too much — a generic idea not phrased this way in the passage.
B. before listening — not mentioned in the text.
C. before responding — the author advocates thoughtful responses, not silence through hesitation.
D. before speaking — correct. The second paragraph concludes by noting that the suggestion to think before you speak may lead to a silent world because of the complex chain required to utter words.
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Question 15
Which of the following forms is assumed by the language style of a person?
An important difference between human beings and animals is the property of language. Animals have a rudimentary information process but this process does not have the sophistication and complexity of human language. If two dogs communicate, they pass on information but they can’t discuss details the way humans can. While humans are blessed to possess the language faculty, most of the time they don’t utilize it to its greatest potential. Perhaps this is because human beings tend to react rather than respond. And a lot of the message of languages is lost in this reaction.
In the daily use of language, people forget the complex process involved in order to put even one word in place. The wonder of this process lies in the fact that it is involuntary in nature, the whole set of chain processes right from the command in the brain to the forming of words from the message required to the movement of the vocal chords and corresponding movements in the lungs and mouth takes place within seconds. Perhaps the whole suggestion of ‘think before you speak’ may lead to a silent world!
In the world of daily interaction, language becomes a marker and a means of projecting identity. The people around us identify us with a certain style of using language and unknowingly, each language user follows this style by habit. It is not a bad idea to record one’s spoken communication from time to time, as this will assist in removing any unwanted elements that the speech may be expressing. Similarly, it is a good idea to step back once in a while and read one’s written communication objectively.
Aa reaction
Ba habit
Ca response
Da thought
Answer:(B) a habit
Explanation
Individual linguistic patterns become deeply ingrained through unreflective, repetitive practice.
A. a reaction — describes impulsive conversational behaviors rather than an ongoing personal communication style.
B. a habit — correct. The final paragraph explains that people adopt an individual style of using language and follow that style by habit.
C. a response — an intentional conversational act rather than the ingrained structural form of personal expression.
D. a thought — internal mental cognition that precedes or accompanies speech rather than the communicative style itself.
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Question 16
Which of the following principles a good communicator should follow?
(a) He should stay organised
(b) He should avoid the use of visuals
(c) He should be authoritarian
(d) He must adjust to the medium
(e) He should prefer the method of story-telling
Choose the correct answer from the options given below:
A(a), (b) and (c)
B(b), (c) and (e)
C(b), (d) and (e)
D(a), (d) and (e)
Answer:(D) (a), (d) and (e)
Explanation
Effective communication relies on structured messaging, medium alignment, and engaging narrative techniques.
(a) He should stay organised — coherent logical organization ensures clarity and audience comprehension.
(d) He must adjust to the medium — adapting delivery style to the specific channel maximizes message reach and reception.
(e) He should prefer the method of story-telling — narrative techniques capture audience attention and aid retention.
(b) He should avoid the use of visuals — incorrect because visual aids significantly enhance clarity and interest.
(c) He should be authoritarian — incorrect because authoritarian attitudes stifle feedback and alienate listeners.
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Question 17
In the context of a classroom teaching ‘Smiles or Frowns’ when used as non-verbal cues, tend to perform which of the following basic functions?
Acontradicting the verbal cue function
Bregulating the verbal cue function
Csubstitute function
Dsupplement function
Answer:(D) supplement function
Explanation
Facial expressions in educational settings enrich and reinforce the teacher's spoken instructions.
A. contradicting the verbal cue function — occurs when non-verbal cues directly clash with spoken words, creating confusion.
B. regulating the verbal cue function — refers to turn-taking cues such as head nods or hand gestures that govern conversational flow.
C. substitute function — involves replacing verbal communication entirely with a non-verbal gesture.
D. supplement function — correct. Smiles and frowns accompany verbal communication to reinforce praise, express approval, or signal concern, thereby supplementing the spoken message.
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Question 18
Consider the argument provided below:
“Sound is impermanent because it is invisible”
Identify the fallacy involved in the above argument on the basis of Indian logic
AFallacy of irrelevant reason
BFallacy of wrong assertion
CFallacy of trivial reason
DFallacy of contradictory reason
Answer:(A) Fallacy of irrelevant reason
Explanation
In Classical Indian logic (Nyaya), an argument commits an informal fallacy when the middle term lacks an invariable relation with the major term.
A. Fallacy of irrelevant reason — correct. Invisibility (hetu) has no necessary invariable concomitance (vyapti) with impermanence (sadhya). Many invisible entities (such as space or atoms in classical schools) are permanent, making the reason irrelevant (savyabhichara or anaikantika).
B. Fallacy of wrong assertion — refers to a flawed thesis statement rather than the lack of invariable concomitance in the middle term.
C. Fallacy of trivial reason — not a recognized primary class of Nyaya fallacies (hetvabhasa).
D. Fallacy of contradictory reason — occurs when the middle term directly proves the opposite of the major term (viruddha).
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Question 19
Non-verbal communication is mostly
Amechanical
Borganic
Cunstructured
Dstructured
Answer:(C) unstructured
Explanation
Non-verbal cues operate continuously without the formal syntactic rules that govern verbal language.
A. mechanical — non-verbal signals are human, spontaneous, and contextual rather than mechanized.
B. organic — while natural, organic does not describe the structural syntax of communicative codes.
C. unstructured — correct. Non-verbal communication lacks formal grammar, standardized vocabularies, or rigid sequential rules, making it predominantly unstructured.
D. structured — applies to verbal communication, which relies on formalized grammars, lexicons, and established syntax.
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Question 20
The average age of a class of 59 students is 18 years. If the age of the teacher is included, then the average increases by 3 months. The age of the teacher is
A28 years
B30 years
C33 years
D35 years
Answer:(C) 33 years
Explanation
The teacher's addition increases both the group size and the collective average age.
Convert the increase of 3 months into years:
3 months = 3 / 12 = 0.25 years
Calculate the total age of the 59 students:
59 × 18 = 1062 years
With the teacher included, the group has 60 members and a new average age of 18.25 years:
60 × 18.25 = 1095 years
Subtract the students' total age from the new total:
1095 - 1062 = 33 years
A. 28 years — assumes an average increase of only 2 months.
B. 30 years — miscalculates the new total group count as 59 instead of 60.
C. 33 years — correct. Matches the derived value of 33 years.
D. 35 years — overestimates the collective contribution of the teacher.
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Question 21
Consider the example provided below:
“This gavaya is like my cow”
This is an example of which means of knowledge (pramāṇa)
Acomparison
Bimplication
Cperception
Dinference
Answer:(A) comparison
Explanation
In Classical Indian epistemology, recognizing an unfamiliar object based on remembered similarity to a known object is the defining function of Upamana.
A. comparison — correct. Upamana (comparison or analogy) yields valid cognition when an observer identifies a wild gavaya in the forest by recollecting its resemblance to a domestic cow.
B. implication — Arthapatti involves postulating an unobserved fact to reconcile an apparent conflict between known truths.
C. perception — Pratyaksha refers to immediate direct cognition produced by sense-organ contact with an object.
D. inference — Anumana derives new knowledge through the observation of a mark (linga) bound by invariable concomitance (vyapti).
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Question 22
A person incurs 10% loss by selling a watch for Rs.1,800. At what price should the watch be sold to earn 10% profit?
ARs. 1980
BRs. 2,160
CRs. 2,200
DRs. 2,360
Answer:(C) Rs. 2,200
Explanation
Selling at a 10% loss means Rs. 1,800 represents 90% of the cost price.
Calculate the target selling price for a 10% profit:
Target SP = 2000 × (1 + 0.10) = 2000 × 1.10 = Rs. 2,200
A. Rs. 1980 — adds 10% directly to the loss selling price of Rs. 1,800 instead of the cost price.
B. Rs. 2,160 — adds 20% to Rs. 1,800 rather than calculating profit on the true cost price.
C. Rs. 2,200 — correct. A 10% profit on the Rs. 2,000 cost price requires a selling price of Rs. 2,200.
D. Rs. 2,360 — an arbitrary arithmetic overestimation.
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Question 23
In a class of 35 students, Rajan is placed seventh from the bottom where as Karan is placed ninth from the top. Divya is placed exactly in between the two. What is the differences in the positions of Rajan and Divya?
A9
B10
C11
D13
Answer:(B) 10
Explanation
Convert all positions to a single direction from the top to find the exact ranking distance.
Karan's rank from top = 9
Rajan's rank from top = 35 - 7 + 1 = 29
Calculate Divya's position, who sits exactly midway between Karan and Rajan:
Divya's position = (9 + 29) / 2 = 38 / 2 = 19
Calculate the difference in ranks between Rajan and Divya:
29 - 19 = 10
A. 9 — counts the number of students sitting strictly between Rajan and Divya rather than the positional difference.
B. 10 — correct. The difference between rank 29 and rank 19 is exactly 10 places.
C. 11 — introduces an off-by-one addition error.
D. 13 — an erroneous calculation of rank spans.
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Question 24
The reasoning which would be helpful in finding new knowledge of facts about the world is
ASpeculative
BInductive
CDeductive
DAnalogical
Answer:(B) Inductive
Explanation
Inductive logic generalizes from empirical observations of specific instances to formulate new universal facts and theories about the natural world.
A. Speculative — involves conjecture without rigorous empirical testing or systematic evidentiary grounding.
B. Inductive — correct. Inductive reasoning is ampliative, moving from observed particulars to general truths, generating genuinely new factual knowledge about the world.
C. Deductive — non-ampliative reasoning where conclusions merely unpack relationships already logically contained within the premises.
D. Analogical — infers probable similarities between entities based on known resemblances rather than establishing new broad factual generalizations.
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Question 25
Match Set I with Set II:
Set-I (Types of listener involved in Communication)
Set-II (Characteristics)
(a) Non-Listener
(i) is engaged in information other than the one need
(b) Marginal Listener
(ii) receives information without processing the significance in the context of communication
(c) Evaluative Listener
(iii) looks into the relevance of the information for understanding its implication
(d) Active Listener
(iv) pays heed to the communicated information occasionally
A(a)-(iv), (b)-(iii), (c)-(ii), (d)-(i)
B(a)-(iii), (b)-(iv), (c)-(i), (d)-(ii)
C(a)-(ii), (b)-(i), (c)-(iii), (d)-(iv)
D(a)-(i), (b)-(iv), (c)-(ii), (d)-(iii)
Answer:(D) (a)-(i), (b)-(iv), (c)-(ii), (d)-(iii)
Explanation
Listeners exhibit different psychological behaviors depending on their level of cognitive focus and engagement during communication.
The correct mapping is:
(a)-(i), (b)-(iv), (c)-(ii), (d)-(iii)
(a) Non-Listener — (i) is engaged in information other than the one need — mentally preoccupied with unrelated matters and entirely detached from the speaker's message.
(b) Marginal Listener — (iv) pays heed to the communicated information occasionally — displays superficial attention, drifting in and out of the conversation.
(c) Evaluative Listener — (ii) receives information without processing the significance in the context of communication — focuses on selective surface details or critical points without absorbing the deeper communicative context.
(d) Active Listener — (iii) looks into the relevance of the information for understanding its implication — fully concentrates, reflects on meaning, and grasps the broader implications of the speaker's message.
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Question 26
Identify the minor term in the following syllogism:
“Some books are not edifying
All books are interesting
Therefore, some interesting things are not edifying”
ASubject of the conclusion and predicate of the second premises
BPredicate of the conclusion and predicate of the first premises
CSubject of the both premises
DPredicate of the both premises
Answer:(A) Subject of the conclusion and predicate of the second premises
Explanation
In a standard categorical syllogism, the minor term is defined as the subject term of the conclusion.
Analyze the structure of the argument:
Conclusion: "some interesting things are not edifying"
Minor term (S) = "interesting things" (subject of the conclusion)
Major term (P) = "edifying" (predicate of the conclusion)
Middle term (M) = "books" (present in both premises)
Locate the minor term in the second premise:
Second premise: "All books are interesting"
In this premise, "interesting" functions as the predicate.
A. Subject of the conclusion and predicate of the second premises — correct. "Interesting things" is the subject of the conclusion and appears as the predicate of the second premise.
B. Predicate of the conclusion and predicate of the first premises — identifies the major term ("edifying") rather than the minor term.
C. Subject of the both premises — identifies the middle term ("books") rather than the minor term.
D. Predicate of the both premises — confuses the roles of the two distinct premise predicates.
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Question 27
Which of the following elements a good classroom communication should adopt?
Effective classroom communication adheres to the foundational Seven Cs of communication, emphasizing clarity, respect, and logical flow.
(a) Concreteness — using specific facts, tangible examples, and clear data prevents ambiguity.
(b) Courtesy — showing mutual respect and polite consideration fosters a supportive classroom atmosphere.
(e) Coherence — presenting ideas in a consistent, logical sequence ensures comprehension.
(c) Filibustering — an obstructive practice of prolonged talking to delay or block progress, which disrupts effective learning.
(d) Fictionalisation — inventing untrue or exaggerated narratives, which undermines instructional accuracy and credibility.
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Question 28
If DRIVER = 12, GOVERNMENT = 20, BELIEVED = 16, then BAT = ?
A6
B8
C10
D12
Answer:(A) 6
Explanation
The code value corresponds to twice the total number of letters in the given word.
DRIVER has 6 letters:
6 × 2 = 12
GOVERNMENT has 10 letters:
10 × 2 = 20
BELIEVED has 8 letters:
8 × 2 = 16
BAT has 3 letters:
3 × 2 = 6
A. 6 — correct. Multiplying the 3 letters of BAT by 2 yields 6.
B. 8 — would correspond to a 4-letter word.
C. 10 — would correspond to a 5-letter word.
D. 12 — would correspond to a 6-letter word like DRIVER.
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Question 29
The price of item A increases by 50 paise every year while the price of item B increases by 25 paise every year. If in 2008, the price of item A was Rs. 3.20 and that of B was Rs. 5.30, in which year item A will cost 40 paise more than the item B?
A2016
B2017
C2018
D2019
Answer:(C) 2018
Explanation
Express both prices in paise to determine the number of years required for item A to surpass item B by 40 paise.
In 2008:
Price of A = 320 paise
Price of B = 530 paise
Let n be the number of years after 2008:
Price of A = 320 + 50n
Price of B = 530 + 25n
Set up the condition where item A costs 40 paise more than item B:
(320 + 50n) - (530 + 25n) = 40
25n - 210 = 40
25n = 250
n = 10
Add 10 years to the base year 2008:
2008 + 10 = 2018
A. 2016 — after 8 years, A costs Rs. 7.20 and B costs Rs. 7.30, so B is still 10 paise more expensive.
B. 2017 — after 9 years, A costs Rs. 7.70 and B costs Rs. 7.55, a difference of only 15 paise.
C. 2018 — correct. In 2018, A costs Rs. 8.20 and B costs Rs. 7.80, exactly 40 paise more.
D. 2019 — after 11 years, the price difference expands to 65 paise.
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Question 30
Two cyclists start from the same place in opposite directions. One goes towards north at 9 kmph and the other goes towards south at 10 kmph. What time will they take to be 47.5 km apart?
A2 ½ hrs
B4 ½ hrs
C4 ¼ hrs
D2 ¼ hrs
Answer:(A) 2 ½ hrs
Explanation
When two objects travel in directly opposite directions, their relative separation speed is the sum of their individual speeds.
Calculate the relative speed:
Relative speed = 9 + 10 = 19 km/h
Calculate the time required to achieve a separation of 47.5 km:
Time = Distance / Relative speed
Time = 47.5 / 19 = 2.5 hours = 2 ½ hrs
A. 2 ½ hrs — correct. At 19 km/h combined separation rate, 47.5 km takes exactly 2.5 hours.
B. 4 ½ hrs — mistakenly uses the difference of speeds (10 - 9 = 1 km/h) with an arithmetic error.
C. 4 ¼ hrs — miscalculates the divisor as 11 km/h.
D. 2 ¼ hrs — calculates 2.25 hours, which would only yield 42.75 km separation.
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Question 31
During the period 2014-2018, which zone exhibits cyclic variation?
The year-wise student strength in a university from different zones of the country in addition to those students who are from foreign countries is shown in table given below:
Student Strength (in hundreds)
Year
North Zone
South Zone
Central Zone
West Zone
East Zone
Foreign countries
2014
15.1
10.2
6.2
4.0
8.2
1.2
2015
16.2
11.5
5.8
4.1
7.8
1.6
2016
17.2
11.8
6.0
4.5
8.5
1.7
2017
17.4
10.8
6.5
4.8
7.6
1.8
2018
18.0
10.6
6.4
5.4
8.6
2.5
AEast zone
BWest zone
CCentral zone
DSouth zone
Answer:(A) East zone
Explanation
Cyclic variation is characterized by successive upward and downward movements alternating across consecutive years.
Trace the annual numbers for each candidate zone:
North Zone: 15.1, 16.2, 17.2, 17.4, 18.0 (strictly increasing trend)
West Zone: 4.0, 4.1, 4.5, 4.8, 5.4 (strictly increasing trend)
South Zone: 10.2, 11.5, 11.8, 10.8, 10.6 (rises then steadily falls, showing no recurrent cycle)
Central Zone: 6.2, 5.8, 6.0, 6.5, 6.4 (inconsistent fluctuations)
A. East zone — correct. East Zone exhibits a rhythmic oscillation, alternating down-up-down-up across every consecutive year.
B. West zone — displays a consistent monotonic upward trend with no declines.
C. Central zone — exhibits irregular changes rather than a regular alternating cycle.
D. South zone — follows a single hump curve rather than cyclical oscillation.
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Question 32
Which category of students have registered overall maximum growth rate (%) from 2014 to 2018?
The year-wise student strength in a university from different zones of the country in addition to those students who are from foreign countries is shown in table given below:
Student Strength (in hundreds)
Year
North Zone
South Zone
Central Zone
West Zone
East Zone
Foreign countries
2014
15.1
10.2
6.2
4.0
8.2
1.2
2015
16.2
11.5
5.8
4.1
7.8
1.6
2016
17.2
11.8
6.0
4.5
8.5
1.7
2017
17.4
10.8
6.5
4.8
7.6
1.8
2018
18.0
10.6
6.4
5.4
8.6
2.5
AForeign countries
BWest Zone
CNorth Zone
DEast Zone
Answer:(A) Foreign countries
Explanation
Calculate the percentage growth from 2014 to 2018 for each listed category using the standard percentage change formula.
Percentage Growth = [(Value in 2018 - Value in 2014) / Value in 2014] × 100%
A. Foreign countries — correct. Foreign student enrollment more than doubled, achieving an overall growth rate of over 108%.
B. West Zone — registered a 35% growth, which is second highest but far below foreign enrollment.
C. North Zone — registered approximately 19.2% growth.
D. East Zone — registered modest growth of less than 5%.
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Question 33
What is the mean of annual growth rates (%) of the student strength of north zone?
The year-wise student strength in a university from different zones of the country in addition to those students who are from foreign countries is shown in table given below:
Student Strength (in hundreds)
Year
North Zone
South Zone
Central Zone
West Zone
East Zone
Foreign countries
2014
15.1
10.2
6.2
4.0
8.2
1.2
2015
16.2
11.5
5.8
4.1
7.8
1.6
2016
17.2
11.8
6.0
4.5
8.5
1.7
2017
17.4
10.8
6.5
4.8
7.6
1.8
2018
18.0
10.6
6.4
5.4
8.6
2.5
A6.24
B4.51
C3.86
D4.82
Answer:(B) 4.51
Explanation
Calculate each year-over-year annual percentage growth rate for the North Zone and find their arithmetic mean.
North Zone annual values (in hundreds):
2014: 15.1, 2015: 16.2, 2016: 17.2, 2017: 17.4, 2018: 18.0
Sum the four annual growth rates:
7.2848 + 6.1728 + 1.1628 + 3.4483 = 18.0687%
Divide by 4 to obtain the mean annual growth rate:
Mean = 18.0687 / 4 ≈ 4.517% ≈ 4.51
A. 6.24 — an overestimation resulting from omitting the low-growth years.
B. 4.51 — correct. Matches the arithmetic mean of the four annual rates.
C. 3.86 — divides the cumulative 4-year growth by 5 instead of averaging annual rates.
D. 4.82 — computes overall 2014-2018 growth divided by 4 rather than averaging the individual yearly percentages.
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Question 34
What was the percentage (%) of students from foreign countries in the year 2018?
The year-wise student strength in a university from different zones of the country in addition to those students who are from foreign countries is shown in table given below:
Student Strength (in hundreds)
Year
North Zone
South Zone
Central Zone
West Zone
East Zone
Foreign countries
2014
15.1
10.2
6.2
4.0
8.2
1.2
2015
16.2
11.5
5.8
4.1
7.8
1.6
2016
17.2
11.8
6.0
4.5
8.5
1.7
2017
17.4
10.8
6.5
4.8
7.6
1.8
2018
18.0
10.6
6.4
5.4
8.6
2.5
A~4.21%
B~3.52%
C~5.24%
D~4.85%
Answer:(D) ~4.85%
Explanation
Sum the student strengths across all zones for 2018 to determine total university enrollment, then compute the foreign student share.
Values for 2018 (in hundreds):
North: 18.0, South: 10.6, Central: 6.4, West: 5.4, East: 8.6, Foreign: 2.5
Calculate the total student strength in 2018:
Total = 18.0 + 10.6 + 6.4 + 5.4 + 8.6 + 2.5 = 51.5 (hundreds)
A. ~4.21% — omits foreign students from the overall total denominator.
B. ~3.52% — calculates the share against the combined total of multiple years.
C. ~5.24% — uses the 2017 total student enrollment instead of 2018.
D. ~4.85% — correct. Represents 2.5 out of 51.5 hundred total students.
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Question 35
Which was the year when the students from east zone had maximum representation (%) in the total student strength of the university?
The year-wise student strength in a university from different zones of the country in addition to those students who are from foreign countries is shown in table given below:
Student Strength (in hundreds)
Year
North Zone
South Zone
Central Zone
West Zone
East Zone
Foreign countries
2014
15.1
10.2
6.2
4.0
8.2
1.2
2015
16.2
11.5
5.8
4.1
7.8
1.6
2016
17.2
11.8
6.0
4.5
8.5
1.7
2017
17.4
10.8
6.5
4.8
7.6
1.8
2018
18.0
10.6
6.4
5.4
8.6
2.5
A2016
B2018
C2014
D2015
Answer:(C) 2014
Explanation
Compute the total university strength for each year and determine the percentage represented by the East Zone.
Calculate yearly totals (in hundreds) and East Zone percentages:
2014 Total = 15.1 + 10.2 + 6.2 + 4.0 + 8.2 + 1.2 = 44.9
East Zone % = (8.2 / 44.9) × 100% ≈ 18.26%
2015 Total = 16.2 + 11.5 + 5.8 + 4.1 + 7.8 + 1.6 = 47.0
East Zone % = (7.8 / 47.0) × 100% ≈ 16.60%
2016 Total = 17.2 + 11.8 + 6.0 + 4.5 + 8.5 + 1.7 = 49.7
East Zone % = (8.5 / 49.7) × 100% ≈ 17.10%
2017 Total = 17.4 + 10.8 + 6.5 + 4.8 + 7.6 + 1.8 = 48.9
East Zone % = (7.6 / 48.9) × 100% ≈ 15.54%
2018 Total = 18.0 + 10.6 + 6.4 + 5.4 + 8.6 + 2.5 = 51.5
East Zone % = (8.6 / 51.5) × 100% ≈ 16.70%
A. 2016 — East Zone stood at 17.10%, which is lower than 2014.
B. 2018 — has the highest absolute enrollment (8.6) but a lower percentage share (16.70%) due to higher total enrollment.
C. 2014 — correct. East Zone represented 18.26% of the total university strength, the highest share among all years.
D. 2015 — East Zone stood at 16.60%.
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Question 36
Which of the following is generally associated with the domain name of an educational institution?
A.org
B.edu
C.com
D.inst
Answer:(B) .edu
Explanation
Top-level domain names are categorized according to organizational function and purpose under standard Internet domain architecture.
A. .org — designated primarily for non-profit and non-governmental organizations.
B. .edu — correct. Reserved exclusively for accredited educational institutions such as colleges, universities, and research institutes.
C. .com — commercial top-level domain intended for general businesses and commercial entities.
D. .inst — not a standard recognized generic top-level domain for accredited academic bodies.
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Question 37
Which of the following commission/committee in the post-independent India has paid attention all the levels of education?
ARadhakrishnan Commission
BMudaliar Commission
CKothari Commission
DAcharya Rammurthi Committee
Answer:(C) Kothari Commission
Explanation
The Kothari Commission (1964-1966) was the first education commission in independent India entrusted with a comprehensive mandate spanning primary, secondary, and higher education.
A. Radhakrishnan Commission — appointed in 1948-1949 specifically to review and restructure university education.
B. Mudaliar Commission — appointed in 1952-1953 specifically to investigate and reform secondary education.
C. Kothari Commission — correct. Chaired by Dr. D. S. Kothari, its historic report titled "Education and National Development" comprehensively evaluated all stages from primary through university levels.
D. Acharya Rammurthi Committee — established in 1990 to review the implementation of the National Policy on Education 1986.
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Question 38
Identify the encompassing term that involves the use of electronic platforms to conduct a company’s business.
AE-Business
BE-Commerce
CE-Marketing
DE-Governance
Answer:(A) E-Business
Explanation
Electronic business is the comprehensive umbrella term encompassing all digitally enabled business processes and operations.
A. E-Business — correct. Encompasses internal supply chain management, enterprise resource planning, customer service, and commercial transactions across digital platforms.
B. E-Commerce — a subset of e-business focused strictly on the commercial buying and selling of goods and services over the Internet.
C. E-Marketing — a specialized subset of e-business dealing with online promotion, digital advertising, and market research.
D. E-Governance — applies electronic information technologies to government administration and public citizen services rather than commercial corporate management.
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Question 39
The purpose of Gurukul system of education is to
APromote equality and excellence
BMinimise stress in learning
CEmpowering for future learning
DEncourage self-help
Answer:(A) Promote equality and excellence
Explanation
The traditional Gurukul system immersed disciples in a residential community that united moral character building with academic mastery.
A. Promote equality and excellence — correct. Students from all backgrounds lived together under the guru, cultivating egalitarian brotherhood while pursuing intellectual, physical, and spiritual excellence.
B. Minimise stress in learning — while residential ashram living offered tranquility, stress reduction was not its primary educational objective.
C. Empowering for future learning — a modern educational concept rather than the defining objective of ancient gurukul pedagogy.
D. Encourage self-help — daily ashram duties cultivated self-reliance, but broader personal and moral excellence remained the overarching purpose.
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Question 40
Which of the following is not considered as a form of secondary storage?
ARAM
BFloppy Disk
COptical Disk
DFlash Drive
Answer:(A) RAM
Explanation
Computer memory is architecturally divided into primary volatile internal memory and secondary non-volatile auxiliary storage.
A. RAM — correct. Random Access Memory is the primary internal memory directly accessed by the CPU to hold executing program instructions and active data, and it is volatile.
B. Floppy Disk — a legacy magnetic secondary storage medium.
C. Optical Disk — non-volatile secondary storage that reads and writes data using laser technology (such as CDs, DVDs, and Blu-rays).
D. Flash Drive — non-volatile solid-state secondary storage that retains data when powered off.
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Question 41
One of the parameters used to characterise the air quality at a location is PM₂.₅. Here, the suffix ‘2.5’ refers to
Aaverage number of suspected particles in 10 cm³ of air
Bsize of suspended particles in certain units
Cconcentration of oxides of sulphur and nitrogen
Dconcentration of suspended particles in 2.5 m³ of air
Answer:(B) size of suspended particles in certain units
Explanation
Particulate matter metrics categorize atmospheric aerosols based on their aerodynamic physical diameter.
A. average number of suspected particles in 10 cm³ of air — particulate metrics measure mass concentrations or physical diameters, not particle counts per 10 cubic centimeters.
B. size of suspended particles in certain units — correct. The subscript 2.5 designates the aerodynamic diameter threshold of fine particles measuring 2.5 micrometers (microns) or smaller.
C. concentration of oxides of sulphur and nitrogen — measures gaseous pollutants rather than suspended particulate size.
D. concentration of suspended particles in 2.5 m³ of air — standard air concentration is reported in micrograms per cubic meter (µg/m³), not over an arbitrary 2.5 m³ volume.
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Question 42
Which of the following devices enables a computer to transmit data over telephone lines?
ACPU
BHub
CSwitch
DModem
Answer:(D) Modem
Explanation
Analog telephone networks cannot transmit raw digital signals directly without electronic modulation and demodulation.
A. CPU — the central processing unit that executes program instructions inside the computer.
B. Hub — a multiport physical layer network hardware device that broadcasts data packets to all connected local nodes.
C. Switch — an intelligent data link layer device that forwards frames selectively based on MAC addresses in a local area network.
D. Modem — correct. A modulator-demodulator converts digital computer pulses into analog audio frequencies for telephone line transmission, and converts incoming analog signals back to digital form.
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Question 43
The scheme “Unnat Bharat Abhiyan” aims to
AIncrease strength of students in colleges in India
BLink higher educational institution in the country with at least 5 villages
CIncrease quality in Higher Education
DIncrease number of colleges in India
Answer:(B) Link higher educational institution in the country with at least 5 villages
Explanation
Unnat Bharat Abhiyan was launched by the Ministry of Education to connect higher educational institutions directly with rural development processes.
A. Increase strength of students in colleges in India — targets gross enrollment ratio expansion handled by programs like RUSA.
B. Link higher educational institution in the country with at least 5 villages — correct. Participating colleges and universities adopt a minimum of five villages to address development challenges through technical and academic expertise.
C. Increase quality in Higher Education — a general systemic objective pursued by accreditation agencies such as NAAC.
D. Increase number of colleges in India — focuses on physical institutional capacity rather than village adoption for rural transformation.
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Question 44
Which of the following diseases are due to polluted water?
(a) Giardia
(b) Dengue
(c) Amoebiasis
(d) Typhoid
Choose the correct answer from the options given below:
A(a), (b) and (d)
B(b), (c) and (d)
C(a), (b), (c) and (d)
D(a), (c) and (d)
Answer:(D) (a), (c) and (d)
Explanation
Waterborne diseases are transmitted through the ingestion of water contaminated with pathogenic bacteria or parasites.
(a) Giardia — an intestinal protozoan parasite contracted by drinking contaminated water containing Giardia lamblia cysts.
(c) Amoebiasis — a severe gastrointestinal infection caused by ingesting food or water contaminated with Entamoeba histolytica cysts.
(d) Typhoid — an acute systemic bacterial infection caused by Salmonella Typhi transmitted via faecally contaminated water.
(b) Dengue — a mosquito-borne viral disease transmitted by the bite of an infected Aedes aegypti mosquito rather than drinking polluted water.
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Question 45
Which of the following is the largest sink of CO₂ gas?
AForests
BOceans
CIce sheets
DGrasslands
Answer:(B) Oceans
Explanation
Earth's oceans store massive reserves of carbon through physical dissolution and biological marine processes.
A. Forests — represent a vital terrestrial carbon sink storing hundreds of gigatons of carbon, but their capacity is far smaller than oceanic reservoirs.
B. Oceans — correct. The world's oceans form the largest active carbon sink on Earth, holding an estimated 38,000 to 40,000 gigatons of carbon in dissolved and biological forms.
C. Ice sheets — preserve ancient atmospheric samples trapped in air bubbles, but do not actively absorb and dissolve large quantities of atmospheric carbon dioxide.
D. Grasslands — store substantial carbon in underground root systems, but their total capacity remains modest compared to ocean basins.
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Question 46
Which of the following is non-vehicular pollutant?
A. chlorofluorocarbon — correct. Chlorofluorocarbons (CFCs) are synthetic haloalkanes emitted from refrigeration systems, aerosol propellants, and industrial solvents, not vehicle exhausts.
B. carbon-monoxide — a primary gaseous pollutant emitted in vehicle tailpipe exhaust from incomplete hydrocarbon combustion.
C. hydrocarbon — unburned fuel vapors emitted from vehicular exhaust manifolds and fuel tanks.
D. particulate matter — fine soot and aerosol particles produced directly by diesel and gasoline combustion engines.
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Question 47
NMEICT is an acronym for
ANational Massive Education through Information and Communication Technology
BNational Mission on Education through Information and Communication Technology
CNational Multipurpose Education through Information and Communication Technology
DNational Mode of Education through Information and Communication Technology
Answer:(B) National Mission on Education through Information and Communication Technology
Explanation
NMEICT was launched by the Central Government to leverage ICT tools for educational empowerment across India.
A. National Massive Education through Information and Communication Technology — an incorrect phrase.
B. National Mission on Education through Information and Communication Technology — correct. A centrally sponsored scheme under the Ministry of Education to extend broadband connectivity and e-content to educational institutions.
C. National Multipurpose Education through Information and Communication Technology — an incorrect phrase.
D. National Mode of Education through Information and Communication Technology — an incorrect phrase.
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Question 48
Identify the scheme which aims to encourage Social Science Research in Policy relevant areas so as to provide vital inputs in policy formulation, implementation and evaluation
AICSSR Fellowship
BCognitive Initiatives
CICSSR – IMPRESS
DICSSR Research Projects
Answer:(C) ICSSR – IMPRESS
Explanation
IMPRESS was formulated specifically to support impactful social science research directly linked to governance and policy needs.
A. ICSSR Fellowship — provides general financial stipends to individual doctoral and post-doctoral scholars.
B. Cognitive Initiatives — refers to scientific programs investigating cognitive neuroscience and artificial intelligence.
C. ICSSR – IMPRESS — correct. Impactful Policy Research in Social Science (IMPRESS) is implemented by the ICSSR to fund social science research that informs national policy formulation, implementation, and evaluation.
D. ICSSR Research Projects — traditional academic research grants awarded without the specialized policy-focused framework of the IMPRESS initiative.
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Question 49
What is SWAYAM?
ANon-Governmental Organisation
BDigital Programme to achieve the principles of education
COn-line platform
DName of a web site
Answer:(B) Digital Programme to achieve the principles of education
Explanation
SWAYAM is an integrated national digital learning initiative initiated by the Government of India.
A. Non-Governmental Organisation — incorrect because SWAYAM is a flagship government initiative led by the Ministry of Education.
B. Digital Programme to achieve the principles of education — correct. SWAYAM is officially defined as a national digital programme designed to fulfill the three cardinal principles of education policy: access, equity, and quality.
C. On-line platform — describes its technical delivery delivery mechanism, but its formal policy identity is a comprehensive national digital education programme.
D. Name of a web site — a superficial description that ignores its programmatic scope and policy mandate.
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Question 50
Choose the set of non-renewable resources
AUranium, natural gas, soil
BNatural gas, uranium, phosphates
CPetroleum, uranium, geothermal energy
DShale gas, uranium, soil
Answer:(B) Natural gas, uranium, phosphates
Explanation
Non-renewable resources exist in finite geological quantities and cannot be replenished at a rate matching human consumption.
A. Uranium, natural gas, soil — soil is formed dynamically through pedogenesis and is considered a conditionally renewable resource.
B. Natural gas, uranium, phosphates — correct. All three are finite, exhaustible geological resources that do not regenerate on human timescales.
C. Petroleum, uranium, geothermal energy — geothermal heat is a continuous renewable geophysical energy source.
D. Shale gas, uranium, soil — soil is biologically and pedologically replenished over ecological time.
100 questions with the answer key and explanations.
Question 1
A statement of change in financial position typically would NOT disclose the effect of
Ashare capital issued to acquire productive facilities
Bdividends on share declared
Ccash dividend declared but not yet paid
Dpurchase and retirement of treasury stock
Answer:(B) dividends on share declared
Explanation
Under the all-financial-resources concept of a statement of changes in financial position (funds flow statement), transactions altering the capital structure are disclosed even without immediate cash impact.
A. share capital issued to acquire productive facilities — Disclosed as a simultaneous financing and investing transaction under the all-financial-resources concept.
B. dividends on share declared — Correct. Declaring a dividend on shares (stock dividend or bonus shares) merely transfers amounts within shareholders' equity without altering assets, liabilities, or working capital.
C. cash dividend declared but not yet paid — Declaring a cash dividend creates a current liability that reduces net working capital, so it is disclosed.
D. purchase and retirement of treasury stock — Involves an outflow of funds or reduction in equity and liquid resources, so it is disclosed.
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Question 2
Assertion (A) : At times, a business may face the situation where it has to shut down its operations.
Reason (R) : If the revenue is less than its variable cost, the operation should be closed down.
A(A) is correct but (R) is not correct
B(A) and (R) both are correct and (R) is the right explanation of (A)
C(A) and (R) both are correct and (R) is not the right explanation of (A)
DBoth (A) and (R) are incorrect
Answer:(B) (A) and (R) both are correct and (R) is the right explanation of (A)
Explanation
A firm should shut down production in the short run if total revenue is insufficient to cover total variable costs.
Assertion (A) is correct because businesses facing adverse market downturns often encounter circumstances where continuing operations produces losses exceeding total fixed costs.
Reason (R) is correct because when total revenue is less than variable costs (price is below average variable cost), operating adds to losses on every unit produced, so shutting down minimizes losses to fixed costs alone.
Relationship: Reason (R) provides the exact short-run microeconomic shutdown condition that explains Assertion (A).
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Question 3
A ‘sale and lease back’ arrangement is more suitable for a lessee having
Aliquidity crisis
Bsurplus fund
Chigh profit
Dno-profit no-loss
Answer:(A) liquidity crisis
Explanation
In a sale and leaseback arrangement, an enterprise sells an asset it already owns to a financial institution or buyer for immediate cash and simultaneously leases it back to retain uninterrupted operational use.
A. liquidity crisis — Correct. The primary objective is unlocking cash tied up in illiquid capital assets to resolve working capital or cash flow crunches while retaining physical use of the asset.
B. surplus fund — An enterprise with surplus cash has no financial motivation to sell off its assets to generate immediate liquidity.
C. high profit — Highly profitable firms typically acquire assets or use debt financing rather than selling their capital assets.
D. no-profit no-loss — Breaking even does not necessitate selling fixed assets unless coupled with an acute liquidity shortage.
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Question 4
Which one is NOT true regarding the Market Stabilization Scheme (MSS)?
AIt absorbs surplus liquidity of enduring nature arising out of large capital flows
BIt absorbs surplus liquidity through sale of short-dated government securities and treasury bills
CMobilised surplus liquidity is held in the MSS account with the Reserve Bank of India
DMSS account liquidity can be used for normal government expenditure of capital nature
Answer:(D) MSS account liquidity can be used for normal government expenditure of capital nature
Explanation
The Market Stabilization Scheme (MSS) was introduced in April 2004 by the RBI and the Government of India to sterilize excess liquidity generated by heavy capital inflows.
A. It absorbs surplus liquidity of enduring nature arising out of large capital flows — True. The instrument was created to absorb liquidity of an enduring nature arising from external forex flows.
B. It absorbs surplus liquidity through sale of short-dated government securities and treasury bills — True. The RBI issues treasury bills and dated government securities under MSS to mop up excess cash.
C. Mobilised surplus liquidity is held in the MSS account with the Reserve Bank of India — True. The funds raised are sequestered in an identifiable cash account maintained with the RBI.
D. MSS account liquidity can be used for normal government expenditure of capital nature — False. By strict statutory agreement, funds held in the MSS account cannot be utilized to finance normal government expenditure or capital spending, keeping the liquidity completely sterilized.
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Question 5
Arrange the following in order of their manifestations :
(a) Offer
(b) Acceptance
(c) Breach of contract
(d) Contract
Choose the correct option from the following :
A(a), (b), (c) and (d)
B(a), (b), (d) and (c)
C(b), (c), (a) and (d)
D(a), (d), (c) and (b)
Answer:(B) (a), (b), (d) and (c)
Explanation
Under the Indian Contract Act, 1872, the formation and breach of a contract follow a defined chronological progression:
(a) -> (b) -> (d) -> (c)
(a) Offer: The promisor initiates the legal process by communicating a proposal to the other party.
(b) Acceptance: The promisee assents to the proposal, forming a binding agreement.
(d) Contract: When the agreement is enforceable by law under Section 10, it matures into a valid contract.
(c) Breach of contract: A breach can only manifest after a valid contract has been formed and a party fails to fulfill their contractual obligation.
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Question 6
Which among the following institutions is NOT a part of World Bank group?
AInternational Development Association (IDA)
BInternational Monetary Fund (IMF)
CInternational Finance Corporation (IFC)
DMultilateral Investment Guarantee Agency (MIGA)
Answer:(B) International Monetary Fund (IMF)
Explanation
The World Bank Group is composed of five development institutions: IBRD, IDA, IFC, MIGA, and ICSID.
A. International Development Association (IDA) — Part of the World Bank Group providing concessional loans and grants to the poorest developing countries.
B. International Monetary Fund (IMF) — Correct. The IMF is an autonomous Bretton Woods sister organization overseeing the international monetary system and balance of payments stability, not a component of the World Bank Group.
C. International Finance Corporation (IFC) — Part of the World Bank Group fostering private-sector investment in developing nations.
D. Multilateral Investment Guarantee Agency (MIGA) — Part of the World Bank Group offering political risk insurance and credit enhancement to investors.
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Question 7
In which of the following pricing policies, a firm charges higher initial price for the product and reduces it over time as the demand at higher price is satisfied?
APeak load pricing
BIncremental pricing
CSkimming
DPenetration pricing
Answer:(C) Skimming
Explanation
Price skimming is an introductory pricing strategy where a firm sets a high initial price to extract maximum consumer surplus from early adopters before lowering the price to appeal to broader, price-sensitive market segments.
A. Peak load pricing — Charges different prices across peak and off-peak periods based on capacity constraints.
B. Incremental pricing — Prices products based only on the additional costs incurred in producing added units.
C. Skimming — Correct. Accurately describes setting a high initial price and lowering it gradually as segments are exhausted.
D. Penetration pricing — Involves setting a low initial price to rapidly penetrate the market and build substantial volume.
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Question 8
If two regression coefficients are -0.8 and -0.2, then the value of coefficient of correlation is
A-0.16
B-0.50
C+0.40
D-0.40
Answer:(D) -0.40
Explanation
The coefficient of correlation r is the geometric mean of the two regression coefficients with the identical algebraic sign.
Formula:
r = ± √(b_yx × b_xy)
Given b_yx = -0.8 and b_xy = -0.2:
r = -√((-0.8) × (-0.2)) = -√(0.16) = -0.40
Because both regression coefficients are negative, the coefficient of correlation must also be negative, ruling out +0.40.
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Question 9
Which one of the following is used for international money transfer?
ARTGS
BNEFT
CSWIFT
DDD
Answer:(C) SWIFT
Explanation
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the global messaging network that financial institutions use to transmit secure instructions for cross-border funds transfers.
A. RTGS — Real Time Gross Settlement is a domestic payment system for gross, real-time funds transfers within India.
B. NEFT — National Electronic Funds Transfer is a domestic electronic payment system operating in batches in India.
C. SWIFT — Correct. The standardized international interbank messaging protocol connecting banks across nations.
D. DD — A demand draft is a conventional paper payment instrument typically drawn and payable within domestic clearing channels.
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Question 10
Which among the following is NOT true about BASEL?
AInitially it was named as Committee of Banking Regulations and Supervisory Practices (CBRS)
BBASEL was established by the Central Bank Governors of fifteen countries
CIt was established by the end of 1974
DDisturbances in international currency and banking markets were responsible for its establishment
Answer:(B) BASEL was established by the Central Bank Governors of fifteen countries
Explanation
The Basel Committee on Banking Supervision (BCBS) was established in late 1974 by the central bank governors of the Group of Ten (G10) nations, not fifteen countries.
A. Initially it was named as Committee of Banking Regulations and Supervisory Practices (CBRS) — True. It was initially known as the CBRS before adopting its modern designation.
B. BASEL was established by the Central Bank Governors of fifteen countries — False. It was founded by the central bank governors of ten countries (the G10 nations: Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, United Kingdom, and United States, along with Switzerland and Luxembourg).
C. It was established by the end of 1974 — True. The committee was formally established in December 1974.
D. Disturbances in international currency and banking markets were responsible for its establishment — True. The collapse of Bankhaus Herstatt in West Germany and liquidity disruptions in currency markets prompted its creation.
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Question 11
A company issues 10% irredeemable preference shares. The face value per share is ₹ 100, but the issue price is ₹ 95. What is the cost of preference share?
A10.63%
B10.73%
C10.83%
D10.53%
Answer:(D) 10.53%
Explanation
The cost of irredeemable preference shares K_p is the annual dividend divided by the net issue price.
D. 10.53% is the correct cost of preference capital.
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Question 12
As per Section 52 of the Companies Act, 2013, the balance in the Security Premium Account cannot be utilized for
Apayment of dividend
Bwriting off discount on issue of shares
Cissue of fully paid-up bonus share
Dcapital losses
Answer:(A) payment of dividend
Explanation
Section 52(2) of the Companies Act, 2013 restricts the application of securities premium to specific non-dividend purposes.
Permitted applications under Section 52(2) include:
Issuing unissued shares to members as fully paid bonus shares
Writing off preliminary expenses
Writing off commission paid or discount allowed on issue of shares or debentures
Providing for premium payable on redemption of preference shares or debentures
Buy-back of shares under Section 68
A. payment of dividend — Correct. Securities premium is a capital reserve and cannot under any circumstance be distributed as dividends to shareholders.
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Question 13
Under which of the following situations, the decision outcome on evaluation of investment opportunities vary under NPV and IRR methods per se?
(a) Time disparity
(b) Cost disparity
(c) Life disparity
(d) Volume disparity
Choose the correct combination of situations :
A(a) and (d) only
B(b) and (d) only
C(a), (b) and (c) only
D(b), (c) and (d) only
Answer:(C) (a), (b) and (c) only
Explanation
NPV and IRR methods can give conflicting project rankings when evaluating mutually exclusive projects due to three fundamental disparities:
(a) Time disparity: Differences in the timing of cash inflows, where one project yields cash flows early and another late.
(b) Cost disparity: Differences in the initial investment outlay or project scale.
(c) Life disparity: Differences in the economic life spans of the competing projects.
Volume disparity is not an established category for NPV-IRR ranking conflicts in capital budgeting.
Therefore, combination (a), (b) and (c) represents the recognized causes of conflict.
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Question 14
Find the marginal revenue of a firm that sells a product at a price of ₹ 10 and the price elasticity of demand for the product is (-) 2.
A₹ 5
B₹ 10
C₹ 20
D₹ 15
Answer:(A) ₹ 5
Explanation
The relationship connecting marginal revenue MR, price P, and price elasticity of demand e is given by the Amoroso-Robinson formula.
Formula:
MR = P × (1 - 1 / |e|)
Given P = ₹ 10 and |e| = 2:
MR = 10 × (1 - 1 / 2) = 10 × 0.5 = ₹ 5
A. ₹ 5 is the resulting marginal revenue.
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Question 15
Which of the following is an instance of non-conventional dumping?
ASporadic dumping
BPredatory dumping
CReverse dumping
DPersistent dumping
Answer:(C) Reverse dumping
Explanation
Conventional dumping occurs when an exporter charges a lower price in foreign markets than in the home market.
A. Sporadic dumping — Conventional dumping that occurs occasionally to clear unplanned domestic surpluses.
B. Predatory dumping — Conventional dumping where an exporter temporarily sells below cost abroad to drive competitors out of business.
C. Reverse dumping — Correct. In reverse dumping, the firm charges a higher price abroad where demand is inelastic and a lower price at home where demand is elastic, inverting the conventional direction of dumping.
D. Persistent dumping — Conventional international price discrimination where foreign prices are continuously kept lower than domestic prices.
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Question 16
In which of the following commodities, when a consumer spends so much that negative income effect overwhelms the positive substitution effect so as the underlying demand curve is positively sloped?
AInferior goods
BSuperior goods
CGiffen goods
DNormal goods
Answer:(C) Giffen goods
Explanation
A Giffen good is a special type of inferior good where the negative income effect of a price change dominates the positive substitution effect.
When the price of a Giffen good falls, the substitution effect encourages buying more, but the negative income effect heavily reduces purchases because the consumer is effectively richer.
Because the negative income effect exceeds the substitution effect, total quantity demanded falls as price falls, resulting in an upward-sloping demand curve.
C. Giffen goods is the precise microeconomic term for this behavior.
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Question 17
Match List-I with List-II :
List-I
List-II
(a) j = (X̄ - M₀)/σ
(i) Kelly’s coefficient of skewness
(b) j = (Q₃ + Q₁ - 2Mₑ)/(Q₃ - Q₁)
(ii) Bowley’s measure of skewness
(c) j = (P₉₀ + P₁₀ - 2P₅₀)/(P₉₀ - P₁₀)
(iii) Karl Pearson’s coefficient of skewness
A(a)-(iii); (b)-(ii); (c)-(i)
B(a)-(iii); (b)-(i); (c)-(ii)
C(a)-(i); (b)-(ii); (c)-(iii)
D(a)-(ii); (b)-(i); (c)-(iii)
Answer:(A) (a)-(iii); (b)-(ii); (c)-(i)
Explanation
The statistical formulas match their respective coefficients of skewness:
(a)-(iii), (b)-(ii), (c)-(i)
(a) Karl Pearson's coefficient of skewness: Uses mean and mode divided by standard deviation: j = (X̄ - M₀) / σ.
(b) Bowley's measure of skewness: A quartile-based positional measure: j = (Q₃ + Q₁ - 2Mₑ) / (Q₃ - Q₁).
(c) Kelly's coefficient of skewness: A percentile-based measure: j = (P₉₀ + P₁₀ - 2P₅₀) / (P₉₀ - P₁₀).
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Question 18
Excess capacity is NOT noticed in which of the following market conditions?
AMonopoly
BMonopolistic competition
COligopoly
DPerfect competition
Answer:(D) Perfect competition
Explanation
Excess capacity occurs when a firm operates below its optimal output scale where long-run average cost (LAC) is minimized.
In perfect competition, long-run equilibrium requires P = MR = LMC = minimum LAC, ensuring firms produce at full economic capacity with no unutilized resources.
In imperfectly competitive markets (monopoly, monopolistic competition, and oligopoly), the downward-sloping demand curve forces tangency with LAC to the left of the minimum point, resulting in persistent excess capacity.
D. Perfect competition is therefore the market structure free of excess capacity.
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Question 19
Assertion (A) : Reserve Bank of India is an important regulatory and administrative authority to execute FEMA provisions.
Reason (R) : Being monetary authority and custodian of foreign exchange, Reserve bank of India enjoys requisite expertise of FEMA administration.
ABoth (A) and (R) are correct and (R) is the right explanation of (A)
BBoth (A) and (R) are correct but (R) is not the right explanation of (A)
CBoth (A) and (R) are incorrect
D(A) is correct and (R) is not correct
Answer:(A) Both (A) and (R) are correct and (R) is the right explanation of (A)
Explanation
Under the Foreign Exchange Management Act (FEMA), 1999, the Reserve Bank of India serves as the principal regulatory and executing authority for foreign exchange transactions.
Assertion (A) is correct because Sections 10 and 11 of FEMA explicitly empower the RBI to authorize dealers and issue directions regulating external trade and payments.
Reason (R) is correct because the RBI is India's monetary authority and statutory custodian of foreign exchange reserves, possessing the specialized operational expertise necessary for forex administration.
Relationship: Reason (R) directly explains why the regulatory and administrative mandate under FEMA was entrusted to the RBI.
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Question 20
Amount unutilised in Capital Gain Account Scheme for which exemption claimed u/s 54 shall be treated as long-term capital gain, if
A2 years have expired from the date of transfer
B2 years have expired from the date of deposit
C3 years have expired from the date of transfer
D3 years have expired from the date of deposit
Answer:(C) 3 years have expired from the date of transfer
Explanation
Under Section 54 of the Income Tax Act, 1961, capital gains deposited into the Capital Gain Account Scheme must be utilized for constructing a residential house within 3 years from the date of transfer.
If the deposited amount is not utilized within the prescribed period of 3 years from the date of transfer of the original asset, the unutilized sum is charged as long-term capital gain of the previous year in which that 3-year period expires.
C. 3 years have expired from the date of transfer is the statutory deadline specified under Section 54.
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Question 21
Which of the following is true about India Trade Policy (Export-Import), 2015-2019?
(a) Doubling the exports (both merchandise and services)
(b) Achieve 3-5% share in global exports
(c) Introduced two new schemes (MEIS and SEIS)
(d) Introduced simplified Aayat-Niryat Form
Choose the correct answer from the following :
A(a) and (b) only
B(a) and (c) only
C(a), (b) and (c) only
DAll are correct
Answer:(D) All are correct
Explanation
India's Foreign Trade Policy 2015-2020 incorporated all four key targets and structural reforms:
(a) Doubling exports: Aimed to expand exports of goods and services from \ billion to \ billion by 2019-20.
(b) Achieve 3.5% share in global exports: Targeted raising India's share of world trade from 2% to 3.5%.
(c) MEIS and SEIS: Rationalized multiple previous export incentive schemes into the Merchandise Exports from India Scheme and Services Exports from India Scheme.
(d) Simplified form: Introduced the simplified online Aayat-Niryat Form (ANF) to facilitate ease of doing business.
All four statements are correct features of the policy.
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Question 22
Promoting team spirit, harmony and unity within the organization is the principle of
Aorder
Bscalar chain
Cspirit de corps
Dequity
Answer:(C) spirit de corps
Explanation
Henri Fayol's 14 principles of management define key structural and human relation guidelines for administration.
A. order — Ensures systematic arrangement of materials and people: a place for everything and everyone.
B. scalar chain — The formal unbroken line of authority and communication extending from top management to frontline staff.
C. spirit de corps — Correct. French for 'union is strength', this principle directs managers to foster team spirit, harmony, and mutual trust among employees.
D. equity — Applying fair treatment, kindness, and justice to all organizational members.
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Question 23
Match List-I with List-II :
List-I
List-II
(a) Interbank call market
(i) Money Market
(b) Commercial bills
(ii) Promissory note
(c) Commercial papers
(iii) Short-term maturity
(d) Treasury bills
(iv) Government papers
A(a)-(i); (b)-(ii); (c)-(iv); (d)-(iii)
B(a)-(iii); (b)-(i); (c)-(ii); (d)-(iv)
C(a)-(i); (b)-(iii); (c)-(iv); (d)-(ii)
D(a)-(iv); (b)-(iii); (c)-(ii); (d)-(i)
Answer:(B) (a)-(iii); (b)-(i); (c)-(ii); (d)-(iv)
Explanation
Money market instruments align with their key defining characteristics:
(a)-(iii), (b)-(i), (c)-(ii), (d)-(iv)
(a) Interbank call market: Characterized by short-term maturity ranging from overnight call money up to 14 days notice money.
(b) Commercial bills: Essential trade bills discounted and traded within the money market.
(c) Commercial papers: Unsecured short-term negotiable debt issued in the legal form of a promissory note.
(d) Treasury bills: Short-term sovereign debt securities issued by the central government (government papers).
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Question 24
Assertion (A) : Brainstorming technique demands generation of a number of alternatives to a problem.
Reason (R) : Participants generate as many alternatives as possible without evaluating them in brainstorming sessions.
AStatement (A) is correct and (R) are is the correct explanation of (A)
BBoth (A) and (R) are correct but (R) is not the right explanation of (A)
CStatement (A) is correct but (R) is incorrect
DBoth (A) and (R) are correct
Answer:(A) Statement (A) is correct and (R) are is the correct explanation of (A)
Explanation
Brainstorming is a group creativity technique formulated by Alex Osborn that prioritizes volume of ideas over immediate quality.
Assertion (A) is correct because the core mandate of brainstorming is generating a large number of diverse alternative solutions to a defined issue.
Reason (R) is correct because a foundational rule of brainstorming is deferred evaluation, where participants express ideas freely without criticism or judgment.
Relationship: Suspending criticism allows participants to propose numerous creative ideas without fear, directly explaining why a large volume of alternatives is successfully generated.
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Question 25
Redeemable preference shares of ₹ 2,00,000 are to be redeemed at par for which fresh equity shares of ₹ 80,000 are issued at a discount of 10%. What amount should be transferred to Capital Redemption Reserve Account?
A₹ 2,00,000
B₹ 1,20,000
C₹ 1,28,000
D₹ 72,000
Answer:(C) ₹ 1,28,000
Explanation
Under corporate accounting principles and Section 55 of the Companies Act, 2013, the nominal value of preference shares redeemed must be backed by either fresh proceeds or a transfer to Capital Redemption Reserve (CRR).
Calculation:
Nominal value of preference shares to be redeemed = ₹ 2,00,000
Nominal value of fresh equity shares issued = ₹ 80,000
Discount on issue (10% of ₹ 80,000) = ₹ 8,000
Net proceeds received from fresh issue = 80,000 - 8,000 = ₹ 72,000
The shortfall between the nominal redemption requirement and net proceeds from the fresh issue is provided from profits and transferred to CRR:
Transfer to CRR = 2,00,000 - 72,000 = ₹ 1,28,000
C. ₹ 1,28,000 is the amount transferred to Capital Redemption Reserve.
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Question 26
Which of the following does NOT come under the definition of ‘information’ as per the Right to Information Act (RTI Act), 2005?
ALogbooks
BData material held in electronic form
CFile noting
DCircular
Answer:(C) File noting
Explanation
Section 2(f) of the RTI Act, 2005 defines information as any material in any form, specifically enumerating records, documents, memos, emails, opinions, circulars, orders, logbooks, and data material in electronic form.
A. Logbooks — Explicitly included in the statutory definition under Section 2(f).
B. Data material held in electronic form — Explicitly included in Section 2(f).
C. File noting — Correct. File notings reflect internal deliberations and opinions of officials rather than final documents, and were historically held outside the core statutory definition of information.
D. Circular — Explicitly included under Section 2(f).
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Question 27
X is an individual of 55 years of age having gross total income ₹ 3,50,000. What is the tax liability for assessment year 2018-19?
A₹ 5,000
B₹ 2,500
C₹ 2,580
D₹ 3,000
Answer:(C) ₹ 2,580
Explanation
For Assessment Year 2018-19, tax is computed using the applicable slab, Section 87A rebate, education cess, and rounding off under Section 288B.
Rounding off under Section 288B to nearest ₹ 10 = ₹ 2,580
C. ₹ 2,580 is the statutory tax liability.
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Question 28
Which of the following does NOT fall in the ambit of the objectives of Competition Act, 2002?
AEncourage Competition
BPrevent abuse of dominant position
CPrevent monopolistic rights arising out of intellectual property
DRegulate mergers and acquisitions
Answer:(C) Prevent monopolistic rights arising out of intellectual property
Explanation
The Competition Act, 2002 was enacted to promote and sustain competition in markets, protect consumer interests, and prohibit anti-competitive practices.
A. Encourage Competition — A core objective of the Act under its preamble.
B. Prevent abuse of dominant position — Specifically prohibited under Section 4 of the Act.
C. Prevent monopolistic rights arising out of intellectual property — Correct. Section 3(5) of the Competition Act explicitly protects intellectual property rights (patents, copyrights, trademarks), exempting reasonable conditions imposed by IPR holders from anti-competitive scrutiny.
D. Regulate mergers and acquisitions — Governed under Sections 5 and 6 regulating combinations.
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Question 29
Statement I: If the tax liability has been reduced within the legal framework, it is tax planning.
Statement II: If tax liability has been reduced to get benefit of deduction available under the income tax, it is called tax evasion.
ABoth the Statements (I) and (II) are correct
BStatement (I) is correct but (II) is incorrect
CBoth Statements (I) and (II) are incorrect
DStatement (II) is correct but (I) is incorrect
Answer:(B) Statement (I) is correct but (II) is incorrect
Explanation
Tax planning and tax evasion represent opposing legal and ethical approaches to minimizing tax liability.
Statement I is correct because reducing tax liability by taking legitimate advantage of exemptions, deductions, and reliefs within the legal framework constitutes valid tax planning.
Statement II is incorrect because claiming statutory deductions enacted by law is legitimate tax planning or tax avoidance, whereas tax evasion involves unlawful and fraudulent suppression of income or falsification of accounts.
Therefore, Statement I is correct but Statement II is incorrect.
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Question 30
The retail supply chain does NOT include
Amanufactures
Bretailers
Cwholesalers
Dregulators
Answer:(D) regulators
Explanation
A retail supply chain encompasses the sequence of economic intermediaries that move merchandise from production to the final customer.
A. manufactures — The producers that fabricate products at the start of the supply chain.
B. retailers — The merchant intermediaries that sell goods directly to ultimate consumers.
C. wholesalers — The intermediaries that purchase in bulk from manufacturers and resell to retailers.
D. regulators — Correct. Government regulatory bodies establish legal compliance frameworks but do not handle, store, distribute, or trade physical goods along the channel.
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Question 31
Which of the following characteristics are related to relationship marketing?
(a) Product feature orientation
(b) Product benefit orientation
(c) Frequent consumer contact
(d) High concern for quality
Choose the correct option from the following :
A(b), (c) and (d)
B(a), (b) and (c)
C(a), (c) and (d)
D(a), (b) and (d)
Answer:(A) (b), (c) and (d)
Explanation
Relationship marketing focuses on long-term customer engagement and loyalty rather than individual short-term sales transactions.
(a) Product feature orientation is typical of transactional marketing, which emphasizes technical product specifications.
(b) Product benefit orientation is central to relationship marketing because it emphasizes customer value and satisfaction.
(c) Frequent consumer contact is essential to relationship marketing to build trust and maintain continuous interaction.
(d) High concern for quality is an organizational imperative in relationship marketing across all customer touchpoints.
Therefore, (b), (c) and (d) characterize relationship marketing.
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Question 32
Miller-Orr model is used in the management of
Ainventory
Bleverage
Creceivables
Dcash
Answer:(D) cash
Explanation
The Miller-Orr model (1966) is a stochastic mathematical framework designed to determine optimal cash management policies under conditions of fluctuating cash flows.
A. inventory — Managed using models like EOQ and ABC analysis.
B. leverage — Analyzed using EBIT-EPS indifference points and capital structure theories.
C. receivables — Managed through credit policies, aging schedules, and collection periods.
D. cash — Correct. The Miller-Orr model establishes an upper control limit, a lower control limit, and a target return point to manage cash balances with stochastic inflows and outflows.
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Question 33
Match List-I with List-II :
List-I
List-II
(a) 80 TTA
(i) Deduction in respect of payment of interest on loan taken for higher education
(b) 80 CCD
(ii) Deduction in respect of interest on loan taken for residential house property
(c) 80 E
(iii) Deduction in respect of interest on deposits in savings account
(d) 80 EE
(iv) Deduction in respect of contribution to national pension system
A(a)-(iii); (b)-(iv); (c)-(i); (d)-(ii)
B(a)-(iii); (b)-(iv); (c)-(ii); (d)-(i)
C(a)-(iii); (b)-(i); (c)-(ii); (d)-(iv)
D(a)-(i); (b)-(ii); (c)-(iii); (d)-(iv)
Answer:(A) (a)-(iii); (b)-(iv); (c)-(i); (d)-(ii)
Explanation
Sections of the Income Tax Act, 1961 correspond to their respective statutory deductions:
(a)-(iii), (b)-(iv), (c)-(i), (d)-(ii)
(a) Section 80TTA: Deduction up to ₹ 10,000 in respect of interest on deposits in savings bank accounts.
(b) Section 80CCD: Deduction in respect of contribution to the National Pension System (NPS).
(c) Section 80E: Deduction in respect of interest paid on loans taken for higher education.
(d) Section 80EE: Additional deduction in respect of interest on loans taken for residential house property.
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Question 34
Product A requires 10 kg of material at the rate of ₹ 5 per kg. The actual consumption of material for the manufacturing of product A comes to 12 kg of material at the rate of ₹ 6 per kg. Direct material cost variance is
A₹ 22 (favourable)
B₹ 22 (unfavourable)
C₹ 12 (favourable)
D₹ 12 (unfavourable)
Answer:(B) ₹ 22 (unfavourable)
Explanation
Direct material cost variance is the difference between the standard cost of materials allowed and the actual cost incurred.
Formula:
Direct Material Cost Variance (DMCV) = Standard Cost - Actual Cost
Calculations:
Standard Cost = Standard Quantity × Standard Price = 10 kg × ₹ 5 = ₹ 50
Actual Cost = Actual Quantity × Actual Price = 12 kg × ₹ 6 = ₹ 72
DMCV = 50 - 72 = -₹ 22 (unfavourable)
B. ₹ 22 (unfavourable) represents the excess expenditure over standard cost.
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Question 35
‘Doctrine of Caveat Emptor’ means
Abuyer should make payment well in time
Bbuyer should be beware of all aspects of buying
Cbuyer will be responsible for the whole payment
Dbuyer will not be responsible at any cost
Answer:(B) buyer should be beware of all aspects of buying
Explanation
Caveat Emptor is a fundamental doctrine in commercial law originating from Section 16 of the Sale of Goods Act, 1930.
The Latin phrase translates to 'let the buyer beware'.
The rule obligates the purchaser to inspect goods thoroughly and satisfy themselves regarding quality, condition, and fitness for their purpose prior to purchasing.
Unless the seller practices fraud or gives an express warranty, the seller is not responsible for defects that the buyer could have discovered.
B. buyer should be beware of all aspects of buying expresses this legal principle.
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Question 36
The attitude based on beliefs, opinion, knowledge or information about the particular event which the employees possesses is
Abehavioural attitude
Bpositive attitude
Ccognitive attitude
Daffective attitude
Answer:(C) cognitive attitude
Explanation
In organizational behavior, attitude consists of three interrelated components in the CAB model:
A. behavioural attitude — Refers to an intention to act or behave in a certain way toward someone or something.
B. positive attitude — A generalized mindset of optimism rather than a structural attitude component.
C. cognitive attitude — Correct. The opinion, belief, knowledge, or informational segment of an attitude.
D. affective attitude — The emotional or feeling segment of an attitude such as joy or anger.
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Question 37
Which among the following is NOT included in negotiable instrument?
ACheque
BDemand Draft
CPromissory Note
DMutual Fund
Answer:(D) Mutual Fund
Explanation
Under Section 13 of the Negotiable Instruments Act, 1881, a negotiable instrument is defined as a promissory note, bill of exchange, or cheque payable either to order or to bearer.
A. Cheque — An unconditional order in writing drawn on a specified banker, expressly covered under Section 6.
B. Demand Draft — A bill of exchange drawn by a bank on another branch, governed as a negotiable instrument under Section 85A.
C. Promissory Note — An instrument in writing containing an unconditional undertaking to pay, expressly covered under Section 4.
D. Mutual Fund — Correct. Mutual fund units represent collective investment holdings and cannot be freely negotiated or transferred through delivery and endorsement.
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Question 38
Redressal mechanism for consumer disputes under Section 9 of the Consumer Protection Act envisages a
Asingle-tier system
Btwo-tier system
Cthree-tier system
Dopen system independent of hierarchy
Answer:(C) three-tier system
Explanation
Section 9 of the Consumer Protection Act establishes a three-tier quasi-judicial redressal mechanism to settle consumer disputes:
District Forum (District Commission) at the district level
State Commission at the state level
National Consumer Disputes Redressal Commission (NCDRC) at the national level
C. three-tier system is the established institutional framework.
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Question 39
Match List-I with List-II :
List-I (Theories of Profit)
List-II (Economists)
(a) Risk theory of profit
(i) Schumpeter
(b) Innovation theory of profit
(ii) Walker
(c) Rent theory of profit
(iii) Hawley
(d) Dynamic theory of profit
(iv) Clark
A(a)-(iii); (b)-(iv); (c)-(ii); (d)-(i)
B(a)-(iv); (b)-(ii); (c)-(iii); (d)-(i)
C(a)-(iii); (b)-(i); (c)-(ii); (d)-(iv)
D(a)-(iv); (b)-(i); (c)-(ii); (d)-(iii)
Answer:(C) (a)-(iii); (b)-(i); (c)-(ii); (d)-(iv)
Explanation
Economic theories of profit pair directly with their respective originator economists:
(a)-(iii), (b)-(i), (c)-(ii), (d)-(iv)
(a) Risk theory of profit: Propounded by F. B. Hawley, asserting profit is the reward for bearing uninsurable business risk.
(b) Innovation theory of profit: Formulated by Joseph Schumpeter, viewing profit as the transient reward earned by entrepreneurs introducing innovations.
(c) Rent theory of profit: Advanced by F. A. Walker, treating profit as rent of differential managerial ability.
(d) Dynamic theory of profit: Developed by J. B. Clark, arguing profit emerges only in a changing dynamic society.
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Question 40
Statement I: Though closely related, job evaluation and performance appraisal are not the same.
Statement II: The purpose of job evaluation is to fix the remuneration and other relevant benefits.
ABoth the Statements (I) and (II) are correct
BBoth the Statements (I) and (II) are incorrect
CStatement (I) is correct, while Statement (II) is incorrect
DStatement (I) is incorrect, while Statement (II) is correct
Answer:(A) Both the Statements (I) and (II) are correct
Explanation
Job evaluation and performance appraisal serve distinct purposes within human resource management.
Statement I is correct because job evaluation evaluates the relative worth of a job regardless of who occupies it, whereas performance appraisal evaluates how effectively an individual employee performs assigned job duties.
Statement II is correct because the primary purpose of job evaluation is establishing an equitable job hierarchy to fix wage structures, base remuneration, and employee benefits.
Therefore, both Statement I and Statement II are correct.
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Question 41
Building long-term mutually satisfying relations with key customers, suppliers, distributors in order to earn and retain their long-term preference and business is known as
Arelationship marketing
Bsocial marketing
Cniche marketing
Dservice marketing
Answer:(A) relationship marketing
Explanation
Philip Kotler defines relationship marketing as creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.
A. relationship marketing — Correct. Focuses specifically on fostering enduring, mutually beneficial ties with customers, suppliers, and distributors to retain their ongoing business.
B. social marketing — Adapts commercial marketing concepts to promote programs designed to influence behavior for social good.
C. niche marketing — Concentrates marketing efforts on a small, well-defined, and specialized market segment.
D. service marketing — Encompasses the marketing of intangible activities, benefits, or satisfactions.
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Question 42
Which of the following are the rights of a Statutory Auditor?
(a) To receive remuneration
(b) To attend Board of Doctors’ Meeting
(c) To attend the General Meeting
(d) To visit the branch office
Choose the correct answer from the following :
A(a) and (b)
B(a), (b) and (d)
C(a), (c) and (d)
D(a), (b), (c) and (d)
Answer:(C) (a), (c) and (d)
Explanation
Under the Companies Act, 2013, statutory auditors are conferred specific statutory rights to ensure audit independence:
(a) To receive remuneration: Conferred under Section 142 of the Companies Act.
(c) To attend the General Meeting: Section 146 grants the auditor the right to receive notices and attend any general meeting of the company.
(d) To visit the branch office: Section 143(1) and 143(8) empower the auditor to access accounts and inspect branch offices.
Statement (b) is an invalid right because statutory auditors do not possess a statutory entitlement to attend internal meetings of the board of directors unless specifically invited.
Therefore, (a), (c) and (d) are legitimate statutory rights.
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Question 43
Following are the steps in the activity-based cost allocation :
(a) Identification of the main activities
(b) Collection of cost pool
(c) Determination of the activity cost drivers
(d) Calculation of activity driver rate
(e) Charging the cost of activities to products
Select the correct sequence of the above steps :
A(a), (b), (c), (e), (d)
B(a), (b), (e), (d), (c)
C(a), (b), (c), (d), (e)
D(a), (d), (c), (b), (e)
Answer:(C) (a), (b), (c), (d), (e)
Explanation
Activity-Based Costing (ABC) implements cost assignment through a logical five-step procedure:
(a) -> (b) -> (c) -> (d) -> (e)
(a) Identification of the main activities: Identifying distinct organizational tasks such as machining, setup, or inspection.
(b) Collection of cost pool: Grouping overhead costs associated with each identified activity.
(c) Determination of the activity cost drivers: Identifying factors that cause activity costs to vary.
(d) Calculation of activity driver rate: Dividing total activity pool cost by total driver volume.
(e) Charging the cost of activities to products: Multiplying driver rate by actual driver units consumed by each product.
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Question 44
Which among the following is NOT a correct statement?
AHedge funds are not mutual funds.
BHedge funds can be sold to public.
CInvestors in mutual funds must pay various fees and expenses.
DMutual funds provide economies of scale to investment decisions.
Answer:(B) Hedge funds can be sold to public.
Explanation
Hedge funds and mutual funds represent different classes of pooled investment vehicles subject to distinct regulatory regimes.
A. Hedge funds are not mutual funds. — True. Hedge funds are private investment vehicles that utilize aggressive leverage and derivatives.
B. Hedge funds can be sold to public. — False. Hedge funds are strictly limited to accredited, high-net-worth investors and institutions, and are prohibited by regulatory authorities from offering or selling units to the retail general public.
C. Investors in mutual funds must pay various fees and expenses. — True. Mutual fund investors bear expense ratios, management fees, and transaction charges.
D. Mutual funds provide economies of scale to investment decisions. — True. Pooling retail capital reduces brokerage fees, diversification costs, and research overhead.
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Question 45
SIDBI was set up as a subsidiary of IDBI to
Atakeover the functions of small business financing of IDBI
Btakeover the venture capital operation of IDBI
Creconstruct and rehabilitate the sick and closed industrial units financed by IDBI
Dfacilitate, finance and promote India’s foreign trade
Answer:(A) takeover the functions of small business financing of IDBI
Explanation
The Small Industries Development Bank of India (SIDBI) was established in 1990 under an Act of Parliament as a wholly-owned subsidiary of IDBI.
Its mandate was to take over the Small Industries Development Fund and the National Equity Fund from IDBI to function as the principal development financial institution for micro, small, and medium enterprises (MSMEs).
Foreign trade financing was entrusted to EXIM Bank, and industrial reconstruction was handled by BIFR/IIBI.
A. takeover the functions of small business financing of IDBI is the founding objective of SIDBI.
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Question 46
For a very large population the ratio between SE(x̄) and σ is 8 : 40. The Sample size n will be
A5
B25
C32
D48
Answer:(B) 25
Explanation
The standard error of the mean SE(x̄) for a large population is related to population standard deviation σ and sample size n by the standard formula.
Formula:
SE(x̄) = σ / √n
SE(x̄) / σ = 1 / √n
Given the ratio SE(x̄) : σ = 8 : 40 = 1 / 5:
1 / √n = 1 / 5
√n = 5
n = 5² = 25
B. 25 is the resulting sample size.
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Question 47
Which of the following are NOT sources of secondary data?
Research data is classified into primary data and secondary data based on original collection:
Primary data is gathered firsthand directly by the researcher for a specific study. (a) Interviews, (b) Questionnaires, and (c) Observation are the primary methods of firsthand data collection.
Secondary data consists of existing information compiled previously for another purpose, such as (d) unpublished theses and (e) published annual company reports.
Because (a), (b), and (c) are primary sources, they are NOT secondary sources of data.
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Question 48
Which of the following committees is related to the investor protection?
ABhagwati Committee
BN.K. Mitra Committee
CJ.R. Verma Committee
DL. C. Gupta Committee
Answer:(B) N.K. Mitra Committee
Explanation
Capital market committees in India were constituted to address specific regulatory and structural domains:
A. Bhagwati Committee — Appointed to examine regulations concerning takeovers and substantial acquisition of shares.
B. N.K. Mitra Committee — Correct. Formed by SEBI to review and propose a comprehensive legal and structural framework for investor protection in corporate investments.
C. J.R. Verma Committee — Focused on risk containment measures and margin systems in the Indian secondary stock markets.
D. L. C. Gupta Committee — Set up by SEBI to formulate the regulatory framework for introducing financial derivatives in India.
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Question 49
The social environment of the job affects people and is also affected by them and not by management alone, is the main proposition of
Acontingency theory of organization
Bsystem theory of organization
Cclassical theory of organization
DNeo-classical theory of organization
Answer:(D) Neo-classical theory of organization
Explanation
Organizational theories developed over time with contrasting views on worker behavior and informal groups:
A. contingency theory of organization — Suggests there is no single best way to organize, with structure depending on environmental context.
B. system theory of organization — Views an organization as an interconnected open system of inputs, throughputs, and outputs.
C. classical theory of organization — Treats employees as rational economic units motivated primarily by financial rewards and formal hierarchy.
D. Neo-classical theory of organization — Correct. Stemming from the Human Relations Movement and Elton Mayo's Hawthorne studies, it established that the informal social environment and peer groups decisively shape workplace satisfaction and behavior.
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Question 50
Assertion (A) : U-shaped long-run average cost curve is based on the assumption that economies of scale prevails at small levels of production and diseconomies of scale prevails at larger level of production.
Reason (R) : Decreasing returns to scale arises primarily because as the scale of operation increases, it becomes even more difficult to manage the firm effectively.
ABoth (A) and (R) are correct and (R) is the right explanation of (A)
BBoth (A) and (R) are correct and (R) is not the right explanation of (A)
C(A) is correct and (R) is not incorrect
DBoth (A) and (R) are incorrect
Answer:(B) Both (A) and (R) are correct and (R) is not the right explanation of (A)
Explanation
The traditional long-run average cost (LAC) curve derives its shape from internal and external returns to scale:
Assertion (A) is correct because the LAC curve descends initially due to economies of scale (decreasing costs) and turns upward at higher production levels due to diseconomies of scale (increasing costs), creating a U-shape.
Reason (R) is correct because decreasing returns to scale arise when managerial complexities, communication bottlenecks, and coordination inefficiencies increase as firm scale expands.
Relationship: While both statements are true economic propositions, Reason (R) explains only why decreasing returns (the rising right arm of the curve) occur, rather than providing a complete explanation for both phases that create the overall U-shape.
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Question 51
Statement I: The arithmetic mean is an all purpose average.
Statement II: Median and mode are called positional averages.
ABoth the statements (I) and (II) are correct
BBoth the statements (I) and (II) are incorrect
CStatement (I) is correct but (II) is incorrect
DStatement (II) is correct but (I) is incorrect
Answer:(A) Both the statements (I) and (II) are correct
Explanation
Measures of central tendency are categorized into mathematical averages and positional averages.
Statement I is correct because the arithmetic mean is the most common all-purpose mathematical average, utilizing all observations in its calculation.
Statement II is correct because the median and mode depend strictly on position and frequency ranking within an ordered series, making them positional averages.
Therefore, both Statement I and Statement II are correct.
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Question 52
Consumer behaviour does NOT consist which of the following activities?
AObtaining
BConsuming
CDisposition
DProducing
Answer:(D) Producing
Explanation
Consumer behavior encompasses the decision processes and physical actions individuals engage in when evaluating, acquiring, using, or disposing of goods and services.
A. Obtaining — Involves purchasing, searching, and acquiring goods.
B. Consuming — Involves using, storing, and consuming the product.
C. Disposition — Involves how the consumer discards, resells, or recycles the product.
D. Producing — Correct. Production is a supply-side manufacturing function carried out by firms, not a consumer behavior activity.
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Question 53
A firm consumes 90000 units of a certain item of raw material in its production process annually. It costs ₹ 3 per unit, the cost per purchase order is ₹ 300 and the inventory carrying cost is 20% per year. What is the EOQ?
A9470 units
B9487 units
C9480 units
D9840 units
Answer:(B) 9487 units
Explanation
The Economic Order Quantity (EOQ) minimizes total annual ordering and carrying costs.
Formula:
EOQ = √((2 × A × S) / C)
Given:
Annual consumption A = 90,000 units
Cost per order S = ₹ 300
Unit purchase price = ₹ 3
Carrying cost percentage = 20% per year
Carrying cost per unit per year C = 20% × ₹ 3 = ₹ 0.60
B. 9487 units is the resulting economic order quantity.
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Question 54
Which of the following types of goodwill is considered to be the best?
ADog goodwill
BCat goodwill
CRat goodwill
DCow goodwill
Answer:(B) Cat goodwill
Explanation
In accounting and commercial practice, commercial goodwill is traditionally classified using animal characteristics based on customer loyalty:
A. Dog goodwill — Customers are loyal to the person or owner rather than the shop, wandering away if management changes.
B. Cat goodwill — Correct. A cat prefers the house (the established business premises) over the person. Customers continue frequenting the business regardless of changes in ownership, making it the most stable, reliable, and valuable form of goodwill.
C. Rat goodwill — Fugitive and unpredictable, with customers having neither brand nor location attachment.
D. Cow goodwill — Reflects quiet, unenterprising patronage with minimal brand premium.
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Question 55
Match List-I with List-II :
List-I
List-II
(a) Net income approach
(i) Inventory management
(b) Gordan model
(ii) Capital budgeting
(c) Internal rate of return
(iii) Capital structure theory
(d) Reorder level
(iv) Dividend theory
A(a)-(ii); (b)-(iii); (c)-(iv); (d)-(i)
B(a)-(iii); (b)-(iv); (c)-(ii); (d)-(i)
C(a)-(iii); (b)-(iv); (c)-(i); (d)-(ii)
D(a)-(ii); (b)-(i); (c)-(iv); (d)-(iii)
Answer:(B) (a)-(iii); (b)-(iv); (c)-(ii); (d)-(i)
Explanation
Financial models and concepts correspond directly to their respective operational fields:
(a)-(iii), (b)-(iv), (c)-(ii), (d)-(i)
(a) Net income approach: Formulated by David Durand as a theory of capital structure.
(b) Gordon model: Formulated by Myron J. Gordon as a dividend valuation theory.
(c) Internal rate of return: A discounted cash flow technique used in capital budgeting.
(d) Reorder level: A quantitative inventory management threshold indicating when to place a new purchase order.
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Question 56
Statement I: Agreement without consideration is always valid.
Statement II: All contracts are agreements but all agreements are not contracts.
AStatements (I) and (II) both are correct
BBoth Statements (I) and (II) are incorrect
CStatement (I) is incorrect and Statement (II) is correct
DStatement (I) is correct but Statement (II) is incorrect
Answer:(C) Statement (I) is incorrect and Statement (II) is correct
Explanation
Principles of consideration and enforceability under the Indian Contract Act, 1872 define the legal validity of agreements:
Statement I is incorrect because Section 25 explicitly declares that an agreement without consideration is void, subject only to narrow statutory exceptions such as natural love and affection or time-barred debts.
Statement II is correct because every contract requires an underlying agreement, but only agreements that satisfy Section 10 enforceability conditions qualify as contracts.
Therefore, Statement I is incorrect and Statement II is correct.
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Question 57
Match List-I with List-II :
List-I (Objectives of business firms)
List-II (Hypothesis)
(a) Maximization of firms’ growth rate
(i) Baumol’s hypothesis
(b) Managerial utility function
(ii) Marris hypothesis
(c) Satisfying behaviour
(iii) Williamson hypothesis
(d) Sales Maximization
(iv) Cyert-March hypothesis
A(a)-(ii); (b)-(iii); (c)-(iv); (d)-(i)
B(a)-(iii); (b)-(iv); (c)-(i); (d)-(ii)
C(a)-(iv); (b)-(i); (c)-(ii); (d)-(iii)
D(a)-(i); (b)-(ii); (c)-(iii); (d)-(iv)
Answer:(A) (a)-(ii); (b)-(iii); (c)-(iv); (d)-(i)
Explanation
Alternative firm objectives pair directly with their formulating economic hypotheses:
(a)-(ii), (b)-(iii), (c)-(iv), (d)-(i)
(a) Maximization of firms' growth rate: Proposed in Robin Marris's managerial growth model.
(b) Managerial utility function: Formulated by Oliver Williamson, balancing salary, staff, and discretionary spending.
(c) Satisfying behaviour: Advanced by Cyert and March (and Herbert Simon) in behavioral firm theory.
(d) Sales Maximization: Advanced by William J. Baumol under a minimum profit constraint.
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Question 58
In tax laws, donation to approved and notified association for scientific research is allowed as
A125% of the donation
B100% of the donation
C175% of the donation
D150% of the donation
Answer:(D) 150% of the donation
Explanation
Under Section 35(1)(ii) of the Income Tax Act, 1961, weighted deductions were provided for scientific research contributions.
For Assessment Years 2018-19 to 2020-21, any sum paid to an approved and notified research association, university, or college for scientific research qualified for a weighted deduction of 150% of the donation.
D. 150% of the donation is the statutory deduction rate applicable for the examination period.
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Question 59
Match List-I with List-II :
List-I
List-II
(a) Ind AS 16
(i) Income tax
(b) Ind AS 38
(ii) Leasing
(c) Ind AS 17
(iii) Intangible assets
(d) Ind AS 12
(iv) Property, plant and equipments
A(a)-(iv); (b)-(iii); (c)-(ii); (d)-(i)
B(a)-(iv); (b)-(iii); (c)-(i); (d)-(ii)
C(a)-(ii); (b)-(iii); (c)-(iv); (d)-(i)
D(a)-(iv); (b)-(i); (c)-(ii); (d)-(iii)
Answer:(A) (a)-(iv); (b)-(iii); (c)-(ii); (d)-(i)
Explanation
Indian Accounting Standards (Ind AS) align directly with their prescribed subject matters:
(a)-(iv), (b)-(iii), (c)-(ii), (d)-(i)
(a) Ind AS 16: Governs Property, Plant and Equipment.
(b) Ind AS 38: Governs Intangible Assets.
(c) Ind AS 17: Governs Accounting for Leases.
(d) Ind AS 12: Governs Income Taxes.
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Question 60
Which of the following are considered non-parametric tests?
(a) Mann-Whitney U test
(b) Kruskal-Wallis test
(c) F-test
(d) T-test
(e) Chi-square test
Choose the correct option from the following :
A(a), (b) and (e)
B(a), (b) and (c)
C(a), (b), (c) and (d)
D(a), (b), (c), (d) and (e)
Answer:(A) (a), (b) and (e)
Explanation
Statistical hypothesis tests are divided into parametric and non-parametric tests depending on distribution assumptions:
Parametric tests assume known underlying distributions and specific population parameters. The (c) F-test and (d) t-test are parametric tests requiring normal distribution assumptions.
Non-parametric tests are distribution-free and do not depend on stringent population parameter assumptions. The (a) Mann-Whitney U test, (b) Kruskal-Wallis test, and (e) Chi-square test are standard non-parametric tests.
Therefore, (a), (b) and (e) are non-parametric tests.
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Question 61
Assertion (A) : According to Net Income (NI) approach, capital structure decision is relevant in the valuation of firm.
Reason (R) : A firm can change its total value and its overall cost of capital by change in the degree of leverage in its capital structure.
ABoth (A) and (R) are correct and (R) is the right explanation of (A)
BBoth (A) and (R) are correct and (R) is not the right explanation of (A)
CBoth (A) and (R) are incorrect
D(A) is correct and (R) is not correct
Answer:(A) Both (A) and (R) are correct and (R) is the right explanation of (A)
Explanation
Under David Durand's Net Income (NI) approach to capital structure theory:
Assertion (A) is correct because capital structure is viewed as relevant, directly impacting firm valuation and overall cost of capital.
Reason (R) is correct because debt is cheaper than equity and the cost of debt and equity remain constant across leverage levels, so raising leverage reduces overall weighted cost of capital and increases firm value.
Relationship: Reason (R) provides the theoretical mechanism explaining why the capital structure decision is relevant to the valuation of the firm in Assertion (A).
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Question 62
The arithmetic mean of 10 items is 50. If each item is increased by 5, then new arithmetic mean would be
A50
B55
C60
D45
Answer:(B) 55
Explanation
A fundamental mathematical property of the arithmetic mean states that adding a constant k to every observation increases the mean by that exact constant k.
Calculation:
Original Mean = 50
Constant added to each item k = 5
New Mean = Original Mean + k = 50 + 5 = 55
B. 55 is the new arithmetic mean.
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Question 63
After US dollar, which of the following currencies has largest weightage in determining the value of SDR?
AJapanese Yen
BChinese Yuan (Renminbi)
CEuro
DBritish Pound
Answer:(C) Euro
Explanation
The value of the Special Drawing Right (SDR) determined by the International Monetary Fund is based on a basket of five major international currencies.
A. Japanese Yen — Comprises approximately 8% of the SDR basket.
B. Chinese Yuan (Renminbi) — Comprises approximately 11% to 12% of the SDR basket.
C. Euro — Correct. The Euro holds the second largest weight (approximately 30%), behind only the US Dollar (approximately 42% to 43%).
D. British Pound — Comprises approximately 7% to 8% of the basket.
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Question 64
Credit worthiness score in India ranges between
A300 to 600
B300 to 900
C500 to 1000
D900 to 1600
Answer:(B) 300 to 900
Explanation
In India, licensed credit information companies (such as CIBIL, Experian, Equifax, and CRIF High Mark) assign credit scores based on debt repayment history.
The standard credit score scale across all authorized Indian credit bureaus spans a range of 300 to 900 points.
Scores above 750 are generally regarded by lending institutions as prime credit ratings.
B. 300 to 900 represents the official scoring range.
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Question 65
SUGAM is also known as
AITR-1
BITR-2
CITR-3
DITR-4
Answer:(D) ITR-4
Explanation
The Central Board of Direct Taxes (CBDT) provides simplified return forms for various taxpayer classes:
A. ITR-1 — Designated as SAHAJ, meant for salaried resident individuals with total income up to ₹ 50 lakh.
B. ITR-2 — For individuals and HUFs not having income from business or profession.
C. ITR-3 — For individuals and HUFs having income from profits and gains of business or profession.
D. ITR-4 — Correct. Designated as SUGAM, meant for individuals, HUFs, and firms (other than LLPs) with income up to ₹ 50 lakh filing under presumptive taxation under Sections 44AD, 44ADA, or 44AE.
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Question 66
Statement I: t-test and F-test are based on the identical assumptions.
Statement II: t-test is used for comparison between two groups whereas F-test is used for comparison between more than two groups.
ABoth the Statements (I) and (II) are correct
BBoth the Statements (I) and (II) are incorrect
CStatement (I) is correct but (II) is incorrect
DStatement (II) is correct but (I) is incorrect
Answer:(A) Both the Statements (I) and (II) are correct
Explanation
Student's t-test and Snedecor's F-test share the same underlying mathematical distribution assumptions:
Statement I is correct because both parametric tests assume independent random sampling from normally distributed populations with homogeneous variances.
Statement II is correct because the two-sample t-test compares the means of two groups, whereas the ANOVA F-test tests equality across three or more group means simultaneously.
Therefore, both Statement I and Statement II are correct.
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Question 67
Which of the following is the predecessor of the IRDA Act, 1999?
AThe Insurance Act, 1938
BThe Life Insurance Corporation Act, 1956
CThe Marine Insurance Act, 1963
DThe Public Liability Insurance Act, 1991
Answer:(A) The Insurance Act, 1938
Explanation
Statutory regulation of the insurance sector in India developed chronologically:
A. The Insurance Act, 1938 — Correct. Served as the comprehensive parent legislation governing insurance in India prior to the establishment of the statutory Insurance Regulatory and Development Authority under the IRDA Act, 1999.
B. The Life Insurance Corporation Act, 1956 — Nationalized the life insurance business and established the state-owned LIC.
C. The Marine Insurance Act, 1963 — Regulates marine insurance policies and maritime contracts.
D. The Public Liability Insurance Act, 1991 — Mandates compulsory liability insurance for industrial handlers of hazardous substances.
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Question 68
‘Motivation-force or level of efforts is not equal to satisfaction and performance’ is propounded by
APorter-Lawler model
BVroom’s expectancy theory
CX and Y theory
DAdam’s equity theory
Answer:(A) Porter-Lawler model
Explanation
Lyman Porter and Edward Lawler developed an extended expectancy model of motivation:
A. Porter-Lawler model — Correct. Argues that effort (motivation-force) does not lead directly to performance or satisfaction. Instead, effort is moderated by employee abilities and role perceptions, and performance is linked to satisfaction via intrinsic and extrinsic rewards.
B. Vroom’s expectancy theory — Asserts that motivation is a multiplicative product of expectancy, instrumentality, and valence.
C. X and Y theory — Formulated by Douglas McGregor regarding contrasting managerial assumptions about employee nature.
D. Adam’s equity theory — Proposes that motivation depends on perceived fairness between input-outcome ratios.
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Question 69
Which is the most appropriate mode of entry in international business to an enterprise with little experience of international markets?
AAcquisition
BStrategic Alliance
CJoint Venture
DExporting
Answer:(D) Exporting
Explanation
Modes of foreign market entry differ fundamentally in resource commitment, risk exposure, and managerial involvement:
A. Acquisition — Involves substantial capital outlays, high foreign risk, and complex cultural integration.
B. Strategic Alliance — Requires relational coordination and ongoing resource sharing.
C. Joint Venture — Involves shared equity ownership and shared management with a foreign partner.
D. Exporting — Correct. Requires the least operational commitment, minimal direct capital investment abroad, and presents the lowest financial and political risk, making it the most suitable entry mode for novice firms.
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Question 70
Match List-I with List-II :
List-I (Trade and Finance Institution)
List-II (Headquarters)
(a) WTO
(i) Brussels
(b) IMF
(ii) Geneva
(c) FAO
(iii) Washington
(d) EU
(iv) Rome
A(a)-(ii); (b)-(iii); (c)-(iv); (d)-(i)
B(a)-(i); (b)-(iii); (c)-(ii); (d)-(iv)
C(a)-(ii); (b)-(iii); (c)-(i); (d)-(iv)
D(a)-(iii); (b)-(ii); (c)-(i); (d)-(iv)
Answer:(A) (a)-(ii); (b)-(iii); (c)-(iv); (d)-(i)
Explanation
International economic organizations pair directly with their official headquarters cities:
(a)-(ii), (b)-(iii), (c)-(iv), (d)-(i)
(a) World Trade Organization (WTO): Headquartered in Geneva, Switzerland.
(b) International Monetary Fund (IMF): Headquartered in Washington, D.C., United States.
(c) Food and Agriculture Organization (FAO): Headquartered in Rome, Italy.
(d) European Union (EU): Principal institutional headquarters located in Brussels, Belgium.
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Question 71
When a company distributes its products through a channel structure that includes one or more resellers, it is known as
Adirect marketing
Bindirect marketing
Cintegrated marketing
Dmulti-level marketing
Answer:(B) indirect marketing
Explanation
Marketing distribution structures differ based on the presence of independent intermediaries between producer and consumer:
A. direct marketing — Selling directly to consumers without any intermediate resellers, via company stores, online websites, or mail orders.
B. indirect marketing — Correct. Distribution that relies on one or more independent intermediaries (resellers, wholesalers, or retailers) to move products to the consumer.
C. integrated marketing — Aligning all brand messages and promotional tools across various communication channels.
D. multi-level marketing — A direct selling system where participants earn income through retail sales and commissions on recruited distributors.
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Question 72
Organization structure that shows a unique combination of strategy, structure and management process is known as
Afree-form organization
Bvirtual organization
Cnetwork organization
Dhorizontal organization
Answer:(C) network organization
Explanation
In modern organizational design literature, firms adopt specialized structural frameworks:
A. free-form organization — A highly organic, rapidly changing structure that changes configurations without fixed patterns.
B. virtual organization — A small core organization that outsources major business functions to external firms.
C. network organization — Correct. Miles and Snow define the network structure as a unique combination of strategy, structure, and management process where external partners coordinate via market relationships and shared goals.
D. horizontal organization — Organizes work around core cross-functional processes rather than functional departments.
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Question 73
Shopping goods have which of the following features?
(a) These products are generally durable in nature
(b) Consumers generally compare the goods of various sellers and then buy such goods
(c) Per unit price of these goods is generally high
(d) These goods are regularly and continuously in demand
(e) These goods are sold as a result of aggressive promotional efforts
Choose the right answer from the options given below :
A(c), (d) and (e)
B(a), (b) and (c)
C(b), (c) and (d)
D(a), (c) and (e)
Answer:(B) (a), (b) and (c)
Explanation
Shopping goods (such as furniture, apparel, and major consumer appliances) exhibit specific customer purchasing characteristics:
(a) Durable nature: Generally durable and used over extended periods.
(b) Comparative shopping: Consumers spend significant time comparing quality, price, style, and suitability across sellers before buying.
(c) High unit price: Carry higher unit prices compared to convenience goods.
Aggressive promotional selling (e) describes unsought goods (e.g. life insurance).
Therefore, (a), (b) and (c) are the distinct features of shopping goods.
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Question 74
Which one of the following analyses is suitable for risk-return analysis in financial decisions?
ACAPM analysis
BSWOT analysis
CCapital gearing
DEVA analysis
Answer:(A) CAPM analysis
Explanation
Risk and return trade-offs in corporate finance are evaluated using asset pricing models:
A. CAPM analysis — Correct. The Capital Asset Pricing Model mathematically quantifies the relationship between expected return and systematic risk (beta) to determine the hurdle rate for investment decisions.
B. SWOT analysis — A qualitative strategic management tool assessing strengths, weaknesses, opportunities, and threats.
C. Capital gearing — Measures financial leverage by calculating the ratio of fixed-interest debt to equity.
D. EVA analysis — Economic Value Added evaluates operating profit generated above the total cost of capital.
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Question 75
Which of the following is NOT a main stage in a customer relationship life cycle?
ACustomer acquisition
BCustomer development
CCustomer satisfaction
DCustomer annoyance
Answer:(D) Customer annoyance
Explanation
The customer relationship management (CRM) lifecycle outlines the strategic phases of managing customer ties over time:
A. Customer acquisition — Identifying and converting prospects into active customers.
B. Customer development — Upselling, cross-selling, and expanding the scope of customer relationships.
C. Customer satisfaction — Retaining and satisfying customers to prevent churn.
D. Customer annoyance — Correct. Annoyance is an adverse psychological reaction, not a designed functional stage in relationship management.
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Question 76
One belt, one road initiative (BRI) is NOT intended to
Atrade protectionism
Bstrengthening logistic and supply chain
Cimprove cost competitiveness
Drebalance trade dominance
Answer:(A) trade protectionism
Explanation
The Belt and Road Initiative (BRI) is a global infrastructure and international trade connectivity initiative spearheaded by China.
A. trade protectionism — Correct. Trade protectionism involves erecting tariffs and non-tariff barriers to restrict international trade. BRI is designed to expand cross-border trade routes and infrastructural connectivity, directly countering protectionist policies.
B. strengthening logistic and supply chain — A core goal of developing maritime and overland trade corridors.
C. improve cost competitiveness — Aims to lower transport costs and trade friction through enhanced infrastructure.
D. rebalance trade dominance — Seeks to develop alternative Eurasian and global trade routes.
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Question 77
Following are the events of an organizational culture :
(a) Customer orientation and employee policies
(b) Quality orientation, directing and motivating styles
(c) Decision-making, products and services and responsibilities to society
(d) Reaction to competitors and gratitude towards nation
(e) Role ambiguities, trade union and policies
Select the correct sequence for the above events :
A(a), (b), (d) and (e)
B(a), (c), (d) and (e)
C(b), (c), (d) and (e)
D(a), (b), (c) and (d)
Answer:(D) (a), (b), (c) and (d)
Explanation
In organizational behavior frameworks assessing the external-to-internal dimensions of corporate culture, core cultural events encompass:
(a) Customer orientation and employee policies
(b) Quality orientation, directing and motivating styles
(c) Decision-making, products and services and responsibilities to society
(d) Reaction to competitors and gratitude towards nation
Statement (e) addresses role ambiguities and industrial relations, which are organizational stress and conflict variables rather than cultural value events.
Therefore, sequence (a), (b), (c) and (d) defines the integrated cultural dimensions.
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Question 78
What is the probability that sum of outcomes on pair of dice is equal to 8?
A6/36
B5/36
C4/36
D3/36
Answer:(B) 5/36
Explanation
When rolling two fair six-sided dice, the total number of sample space outcomes is 6 × 6 = 36.
Calculation:
Number of favorable outcomes = 5
Probability = Favorable outcomes / Total outcomes = 5 / 36
B. 5/36 is the resulting probability.
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Question 79
The essence of the law of diminishing returns is
Ainelastic production
Bnegative marginal production
Cdeclining total production
Ddeclining average production
Answer:(B) negative marginal production
Explanation
The law of diminishing returns governs production when successive units of a variable input are combined with fixed resources.
In the ultimate stage of production, continued addition of variable inputs leads to overcrowding and organizational friction, resulting in negative marginal production.
A. inelastic production — Relates to price elasticity of supply, not production functions.
B. negative marginal production — Correct. Represents the definitive terminal boundary of the law where each additional unit causes total output to contract.
C. declining total production — A consequence that occurs only once marginal product turns negative.
D. declining average production — Occurs throughout the second stage but does not define the ultimate physical constraint.
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Question 80
Under which of the following situations, economies of scale exists to the potential and persists?
AWhen firm is too small and too specialized
BWhen firms’ decision to hire inputs do not result in an increase in the input costs
CWhen firm is too large and overdiversified
DWhen long-run cost of producing a unit falls as the output increases
Answer:(D) When long-run cost of producing a unit falls as the output increases
Explanation
Economies of scale describe cost efficiencies achieved as production output expands.
A. When firm is too small and too specialized — Small-scale firms often suffer from indivisibilities and cannot achieve full scale economies.
B. When firms’ decision to hire inputs do not result in an increase in the input costs — Describes constant-cost factor markets rather than internal scale economies.
C. When firm is too large and overdiversified — Excessive size typically leads to managerial diseconomies of scale.
D. When long-run cost of producing a unit falls as the output increases — Correct. Directly expresses the definition of economies of scale, where long-run average cost declines as output expands.
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Question 81
Following are the information for a house property :
Municipal value ₹ 4,50,000
Fair rental value ₹ 5,00,000
Standard rent ₹ 4,80,000
Actual rent ₹ 4,20,000
What is the gross annual value of the house property?
A₹ 4,80,000
B₹ 5,00,000
C₹ 4,20,000
D₹ 4,50,000
Answer:(A) ₹ 4,80,000
Explanation
Under Section 23 of the Income Tax Act, 1961, Gross Annual Value (GAV) is determined in a step-by-step sequence:
Step 1: Compute Reasonable Expected Rent (RER):
Higher of Municipal Value (₹ 4,50,000) and Fair Rental Value (₹ 5,00,000) = ₹ 5,00,000
Subject to Standard Rent under Rent Control Act (₹ 4,80,000)
RER = ₹ 4,80,000
Step 2: Compare RER with Actual Rent Received:
Actual Rent = ₹ 4,20,000
Higher of RER (₹ 4,80,000) and Actual Rent (₹ 4,20,000) = ₹ 4,80,000
A. ₹ 4,80,000 is the resulting Gross Annual Value.
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Question 82
Study the following information :
Covariance between X and Y series = -17.8
Standard deviation of X series = 6.6
Standard deviation of Y series = 4.2
No. of pairs of observation = 20
The coefficient of correlation is
A-0.642
B0.642
C0.253
D-0.253
Answer:(A) -0.642
Explanation
Karl Pearson's coefficient of correlation r is calculated from covariance and standard deviations.
Formula:
r = Cov(X, Y) / (σ_x × σ_y)
Given:
Cov(X, Y) = -17.8
σ_x = 6.6
σ_y = 4.2
Calculation:
r = -17.8 / (6.6 × 4.2)
r = -17.8 / 27.72 ≈ -0.6421 ≈ -0.642
A. -0.642 is the resulting coefficient of correlation.
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Question 83
Match List-I with List-II :
List-I
List-II
(a) Fiscal, monetary and industrial policies
(i) Social responsibilities
(b) Social obligations towards several stakeholders
(ii) Stakeholders/interest group
(c) Consumers, shareholders, suppliers, creditors etc.
(iii) Business ethics
(d) Moral principles that defines the right or wrong
(iv) Economic policies
A(a)-(iii); (b)-(ii); (c)-(iv); (d)-(i)
B(a)-(i); (b)-(iii); (c)-(iv); (d)-(ii)
C(a)-(ii); (b)-(iv); (c)-(i); (d)-(iii)
D(a)-(iv); (b)-(i); (c)-(ii); (d)-(iii)
Answer:(D) (a)-(iv); (b)-(i); (c)-(ii); (d)-(iii)
Explanation
Business environment concepts pair directly with their defining descriptions:
(a)-(iv), (b)-(i), (c)-(ii), (d)-(iii)
(a) Fiscal, monetary and industrial policies: Core components of Government Economic policies.
(b) Social obligations towards several stakeholders: The definition and scope of Social responsibilities.
(c) Consumers, shareholders, suppliers, creditors etc.: Distinct Stakeholders and interest groups interacting with the firm.
(d) Moral principles that defines the right or wrong: The foundational definition of Business ethics.
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Question 84
Capital structure and leverage decisions come in the ambit of
Ainvestment decisions
Bdistribution decisions
Cfinancing decisions
Ddividend decisions
Answer:(C) financing decisions
Explanation
Financial management is organized into three major decision areas:
A. investment decisions — Capital budgeting choices concerning asset allocation and capital expenditure.
B. distribution decisions — Logistics and physical channel management in marketing.
C. financing decisions — Correct. Financing decisions determine the optimal capital structure, leverage mix, and debt-equity ratio required to fund business operations.
D. dividend decisions — Determining the proportion of net earnings retained versus distributed to equity shareholders.
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Question 85
Match List-I with List-II :
List-I
List-II
(a) Sec 6 (1)
(i) Agriculture Income
(b) Sec 10AA
(ii) Leave Travel Concession
(c) Sec 10 (1)
(iii) Resident
(d) Sec 10 (5)
(iv) Leave Salary
A(a)-(i); (b)-(iv); (c)-(iii); (d)-(ii)
B(a)-(iii); (b)-(iv); (c)-(ii); (d)-(i)
C(a)-(ii); (b)-(iii); (c)-(iv); (d)-(i)
D(a)-(iii); (b)-(iv); (c)-(i); (d)-(ii)
Answer:(D) (a)-(iii); (b)-(iv); (c)-(i); (d)-(ii)
Explanation
Sections of the Income Tax Act, 1961 pair directly with their respective tax statutory provisions:
(a)-(iii), (b)-(iv), (c)-(i), (d)-(ii)
(a) Section 6(1): Prescribes the statutory conditions for determining an individual's Resident status.
(b) Section 10(10AA): Provides tax exemption for Leave Salary received upon retirement.
(c) Section 10(1): Exempts Agricultural Income from total taxable income.
The channel alternative is NOT to be assessed on the basis of
Aeconomic criteria
Bcontrol criteria
Cadaptive criteria
Daccumulation criteria
Answer:(D) accumulation criteria
Explanation
In marketing management, Philip Kotler specifies three criteria for evaluating marketing channel alternatives:
A. economic criteria — Compares the projected sales, costs, and profitability of each channel option.
B. control criteria — Evaluates how much control the firm retains over pricing, promotion, and brand presentation.
C. adaptive criteria — Assesses the flexibility of channel members to adapt to market shifts.
D. accumulation criteria — Correct. Not a recognized marketing channel evaluation criterion.
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Question 87
Return of income is submitted under which Section of Income-tax Act?
ASection 138 (1)
BSection 142 (1)
CSection 139 (1)
DSection 129 (1)
Answer:(C) Section 139 (1)
Explanation
Provisions governing the filing of returns of income are codified in Chapter XIV of the Income Tax Act, 1961:
A. Section 138(1) — Pertains to disclosure of information respecting assessees to other authorities.
B. Section 142(1) — Governs inquiry before assessment and notices for production of accounts.
C. Section 139(1) — Correct. Mandates that every person whose total income exceeds the basic exemption limit must furnish a return of income on or before the due date.
D. Section 129 — Covers change of incumbent of an office.
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Question 88
Which one of the following is NOT the pre-requisite of price discrimination?
AFirm must have monopoly power
BProduct have multiple close substitutes and different uses
CMarkets are separated and segmented
DPrice elasticity of product must differ in different markets
Answer:(B) Product have multiple close substitutes and different uses
Explanation
For price discrimination to succeed, three fundamental microeconomic prerequisites must be met:
A. Monopoly power: The firm must possess pricing power over the market.
C. Market segmentation: Markets must be effectively separated so buyers cannot resell or arbitrage across segments.
D. Differing elasticities: Price elasticity of demand must differ between market segments.
If a product has multiple close substitutes (B), buyers will substitute toward competing alternatives rather than paying a higher price, destroying the firm's discriminatory pricing power.
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Question 89
Match List-I with List-II :
List-I
List-II
(a) Cyber Crime
(i) Intellectual Property Right Act
(b) Doctrine of Caveat Emptor
(ii) Negotiable Instrument Act
(c) Dishonour of Bill
(iii) Sale of Goods Act
(d) Patent and Copyrights
(iv) The Information Technology Act
A(a)-(iii); (b)-(iv); (c)-(ii); (d)-(i)
B(a)-(iii); (b)-(ii); (c)-(iv); (d)-(i)
C(a)-(iv); (b)-(iii); (c)-(ii); (d)-(i)
D(a)-(ii); (b)-(iv); (c)-(iii); (d)-(i)
Answer:(C) (a)-(iv); (b)-(iii); (c)-(ii); (d)-(i)
Explanation
Legal concepts and offenses pair directly with their governing commercial statutes:
(a)-(iv), (b)-(iii), (c)-(ii), (d)-(i)
(a) Cyber Crime: Governed under The Information Technology Act, 2000.
(b) Doctrine of Caveat Emptor: Codified under Section 16 of the Sale of Goods Act, 1930.
(c) Dishonour of Bill: Governed under the Negotiable Instruments Act, 1881.
(d) Patent and Copyrights: Governed under the Intellectual Property Rights Acts (Patents Act and Copyright Act).
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Question 90
Which of the following commodities is kept outside the purview of GST?
ATobacco products
BPetroleum products
CEdible oils
DInsurance products
Answer:(B) Petroleum products
Explanation
Under Article 366(12A) of the Constitution and Section 9(2) of the CGST Act, 2017, five specified petroleum products are temporarily kept outside the purview of GST:
Petroleum crude, high-speed diesel, motor spirit (petrol), natural gas, and aviation turbine fuel.
Tobacco products are subject to GST along with central excise duty and compensation cess.
Edible oils and insurance services are taxable supplies under the standard GST schedule.
B. Petroleum products remain outside GST until the GST Council recommends their inclusion.
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Question 91
List out from the given statements the important ethical principles that a business should follow :
(a) To take the necessary action for the development of the concerned industry or business.
(b) Pay taxes and discharge other obligations promptly.
(c) To ensure the best utilisation of the human resources.
(d) Refrain from secret kickbacks or pay-offs to customers, suppliers, administrators, etc.
(e) Ensure payment of fair wages and fair treatment of employees.
Choose the correct answer from the options given below :
A(c), (d) and (e)
B(b), (d) and (e)
C(a), (b) and (c)
D(a), (c) and (e)
Answer:(B) (b), (d) and (e)
Explanation
Business ethics establishes moral standards that govern the conduct of enterprises toward society, law, and stakeholders:
(b) Prompt tax payment: A fundamental civic and legal obligation fulfilling corporate duty to society.
(d) Refraining from kickbacks and bribes: Core principle of corporate integrity, honesty, and anti-corruption.
(e) Fair wages and fair treatment: Grounded in human dignity and social justice for labor.
Developing the business (a) and optimal resource utilization (c) are operational and economic management goals rather than moral ethics principles.
Therefore, (b), (d) and (e) represent the ethical principles.
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Question 92
Deduction u/s 37(1) is allowed under tax laws for those expenditures which are
Arevenue
Bcapital
Cboth revenue and capital
Ddeferred revenue expenses
Answer:(A) revenue
Explanation
Section 37(1) of the Income Tax Act, 1961 is the residual omnibus deduction section for business expenditure.
Statutory conditions under Section 37(1):
The expenditure must not be covered under Sections 30 to 36
It must not be in the nature of capital expenditure
It must not be personal expenses of the assessee
It must be laid out wholly and exclusively for the purposes of the business or profession
Because capital and personal expenditures are expressly barred, only revenue expenditure is deductible under Section 37(1).
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Question 93
Which of the following reflects the sum of perceived tangible and intangible benefits and costs to a customer?
ACustomer satisfaction
BCustomer delight
CCustomer value
DCustomer expectation
Answer:(C) Customer value
Explanation
Philip Kotler defines customer value (customer-perceived value) as the customer's evaluation of the difference between total customer benefits and total customer costs.
A. Customer satisfaction — A person's feelings of pleasure or disappointment resulting from comparing a product's perceived performance to expectations.
B. Customer delight — High satisfaction experienced when perceived performance substantially exceeds expectations.
C. Customer value — Correct. Reflects the aggregate combination of tangible and intangible functional, economic, and psychological benefits and costs.
D. Customer expectation — Pre-purchase anticipation formed by past buying experience and promotional claims.
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Question 94
Which of the following are included in digital payment system?
(a) RTGS
(b) Demand draft
(c) NEFT
(d) Cheque
Choose the correct option from the following:
A(a), (c) and (d)
B(b) and (d) only
C(a) and (c) only
D(b), (c) and (d)
Answer:(C) (a) and (c) only
Explanation
Payment mechanisms are classified into paper-based and digital electronic clearing systems:
(a) RTGS: Real Time Gross Settlement is an electronic digital funds transfer network.
(c) NEFT: National Electronic Funds Transfer is an electronic digital batch transfer network.
In contrast, (b) Demand drafts and (d) Cheques are conventional paper-based payment instruments cleared physically through clearing houses.
Therefore, (a) and (c) only are included in the digital payment system.
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Question 95
The current market price of a company’s share is ₹ 90 and the expected dividend per share next year is ₹ 4.5. If the dividend is expected to grow at a constant rate of 8%, the shareholder’s required rate of return will be
A8%
B5%
C20%
D13%
Answer:(D) 13%
Explanation
Under the Gordon Dividend Growth Model, the required rate of return on equity K_e is the sum of the dividend yield and the constant growth rate.
D. 13% is the shareholder's required rate of return.
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Question 96
New reform in Indian banking system include
(a) Digitisation of bank operations
(b) Banking consolidation
(c) Borrowing from Government
(d) Agency work
Choose the correct option from the following:
A(a) and (b)
B(c) and (d)
C(b), (d) and (c)
D(a), (c) and (d)
Answer:(A) (a) and (b)
Explanation
Recent structural reforms in the Indian banking architecture emphasize technological transformation and scale consolidation:
(a) Digitisation of bank operations: Rapid adoption of Core Banking Solutions (CBS), digital payments, mobile banking, and fintech platforms.
(b) Banking consolidation: Mergers and amalgamations of public sector banks to build scale and strengthen capital adequacy.
Borrowing from government and performing traditional agency functions are routine operational activities, not systemic modernization reforms.
Therefore, (a) and (b) represent modern banking reforms.
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Question 97
Currency swap is a method of
Ahedging against foreign exchange risk
Bspeculating in foreign exchange
Cleverage instrument used by cooperative banks
Dmode of payment in international trade
Answer:(A) hedging against foreign exchange risk
Explanation
A currency swap is an agreement between two counterparties to exchange principal and interest payments in different currencies over a predetermined period.
A. hedging against foreign exchange risk — Correct. Corporations and financial institutions execute currency swaps primarily to hedge long-term foreign currency exposure and eliminate exchange rate uncertainty on liabilities.
B. speculating in foreign exchange — Speculators use liquid short-term futures and options rather than customized long-term swap contracts.
C. leverage instrument used by cooperative banks — Cooperative banks do not actively use cross-currency swaps as leverage tools.
D. mode of payment in international trade — Letters of credit and bank transfers are trade payment modes, not currency swaps.
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Question 98
Peter F. Drucker noted the relationship between selling and marketing in which of the following terms?
AMarketing is a subsidiary component of selling
BThe aim of marketing is to make selling superfluous
CThe aim of selling is to make marketing superfluous
DSelling and marketing are essentially the same thing
Answer:(B) The aim of marketing is to make selling superfluous
Explanation
Peter F. Drucker articulated the definitive relationship between marketing and selling in his seminal work Management: Tasks, Responsibilities, Practices (1973):
'There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous.'
Drucker explained that true marketing seeks to understand the customer so thoroughly that the product fits their needs perfectly and sells itself.
Selling and promotional pushes become unnecessary when marketing has already aligned the product with customer demand.
B. The aim of marketing is to make selling superfluous is Drucker's famous principle.
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Question 99
Quantitative import restrictions that limit the quantity of a product being imported is called
Aembargo
Bquota
Ctrade restraint
Dimport tariff
Answer:(B) quota
Explanation
Commercial trade barriers limit international merchandise flows using either price or volume controls:
A. embargo — An absolute legal prohibition or total ban on trade with a specific country or commodity.
B. quota — Correct. A direct physical ceiling or numerical quantitative restriction on the volume of a specific good allowed to be imported during a given time frame.
C. trade restraint — A generic umbrella term encompassing all forms of commercial barriers.
D. import tariff — A price-based tax or customs duty levied on imported goods.
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Question 100
Chalapathi Rao Committee was constituted for restructuring of
AState Financial Corporation in India
BCommercial Banks in India
CCo-operative Banks in India
DRegional Rural Banks in India
Answer:(D) Regional Rural Banks in India
Explanation
Financial sector restructuring committees in India were mandated to reform specific banking segments:
A. State Financial Corporation — Examined by the Khan Committee and related DFI groups.
B. Commercial Banks — Evaluated under the Narasimham Committee I and II.
C. Co-operative Banks — Examined under the Vaidyanathan and Madhava Rao Committees.
D. Regional Rural Banks in India — Correct. The Chalapathi Rao Committee (2001) was appointed by the RBI and NABARD to recommend financial restructuring, recapitalization, and operational consolidation for Regional Rural Banks (RRBs).
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Paper 1 had 50 questions and Paper 2 (Commerce) had 100 questions, for 150 in total across 3 hours.
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